HSBC’s 3Q 2020 Earnings Release signalled it would have to overhaul its business model and seek to generate more income from bank accounts.

With interest rates worldwide now rock-bottom, and rumours of negative interest rates, HSBC is struggling to charge more for loans to borrowers than it pays out to depositors, and warned that net interest income would remain under pressure.

Ewen Stevenson, HSBC’s chief financial officer, told Reuters: “We will have to look at charging for basic banking services in some markets, because a large number of our customers in this environment will be losing us money.”

HSBC reported a 35% fall in quarterly profit. The banking group’s reported profit before tax in Q3 2020 was $3.1bn (£2.38bn), down $1.8bn (£1.38bn) on Q3 2019. The adjusted profit before tax was $4.3bn (£3.3bn), down $1.1bn (£0.85bn).

HSBC now plans to accelerate its plans to shrink in size and will slash costs further than previously suggested.

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HSBC and other banks stopped paying dividends earlier this year at the request of the Financial Conduct Authority.

Adam Vettese, analyst at investment platform eToro, said: “HSBC’s results are not what shareholders will have wanted to wake up to this morning, but conditions in banking are tough at the moment.

“Record low interest rates mean profits are being squeezed, while there is a risk of a significant escalation in loan defaults if government support for workers fails to protect jobs.

“Therefore, it is unsurprising that HSBC has decided to trim some fat in order to maintain profits throughout what is an exceptionally trying time for the sector. However, whereas HSBC’s reliance on Asia can sometimes be a disadvantage, it may be beneficial at the moment.

“Data shows that while the economic recovery is floundering in Europe, it is proving resilient in the Far East. If that can continue, then it might help HSBC emerge from this crisis quicker than most.”