Company: HBCYF
Filing Date: 2025-04-29
Form Type: 6-K
Source: 0001089113-25-000046
Chunk: 36

Company: HSBC HOLDINGS PLC
Filing Date: 2025-04-29
Form: 6-K
Chunk 36
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 forecasts, financial markets and business and consumer sentiment. A further escalation of tariffs and trade tensions could lead to lower trade volumes, investment, consumer spending and, ultimately, weaker global GDP growth. Supply chains could also come under renewed pressure from a fragmented trade landscape, which could cause inflation to rise again. A weaker economic environment and higher inflation creates challenges for central banks, which are likely to be more cautious about the timing of interest rate cuts if inflation persists above target rates. If interest rates remain high, loan demand across key consumer and business segments may be impacted and credit quality could deteriorate, weighing on real estate prices and business investment. Policymakers in mainland China have scope to expand policy support, through a mix of higher government spending and lower interest rates, to offset the potential impact from weaker trade growth. Separately, European governments are also looking to raise defence spending, which could improve medium-term growth prospects. Tariffs, disruption to supply chains and lower trade volumes could negatively impact fee income and demand for financing, although trade redirection and the reconfiguration of supply chains may also present new opportunities. Public spending as a proportion of GDP is likely to remain high for most key economies. Against a backdrop of high global interest rates, a high level of public debt issuance and US dollar volatility, borrowing costs for certain countries could increase further. This could adversely impact the fiscal capacity and debt sustainability of highly-indebted sovereign issuers. Geopolitical risks remain elevated. Heightened strategic competition between the US and China is impacting global supply chains, which may in turn impact the Group’s operations. Continued hostilities in the Middle East could broaden risks for the shipping industry and for end-industry customers through higher freight costs. During the first quarter of 2025, several countries took sanctions and export controls-related actions that could result in significant adverse commercial, operational or reputational consequences for HSBC and its customers if not considered and managed appropriately. Sanctions on Russia continue as a result of the Russia-Ukraine war although the US focus has shifted to negotiating an end to the conflict. The differing stance from that adopted by the UK and the EU could lead to disparities in government approaches to lifting sanctions against Russia, and result in operational, compliance and reputational challenges for the Group . The US has also prioritised targeting illicit fentanyl and other synthetic opioid trafficking into the US, designating several drug cartels under US counter-terrorism sanctions in the first quarter of 2025 , which creates additional civil litigation and criminal prosecution risk, along with secondary sanctions risks for non-US HS