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HSBC’s operations are being refocused on Asia.

Photo: Liau Chung-ren/Zuma Press

Global banking giant HSBC Holdings PLC said net profit more than doubled in the first quarter, as the world economy began to recover from the coronavirus pandemic.

The London-based lender, which makes most of its profit in Hong Kong and mainland China, earned $3.88 billion in the first three months of the year, up from $1.79 billion in the same period last year.

HSBC reduced provisions for bad loans by $435 million in the quarter,  which it said was mostly due to an improved economic outlook. It had taken more than $3 billion of new provisions in the same period last year.

HSBC Chief Executive Noel Quinn is one year into overhauling the bank to refocus its operations on Asia. In February, he said he was considering selling the unprofitable U.S. retail operations and pouring about $6 billion of investment into Asia in the next five years. HSBC is also in talks to sell its unprofitable French retail bank.

Geopolitical tensions between China and the West have strained Mr. Quinn’s ambitions. Last year, HSBC supported China’s imposition of a national-security law in Hong Kong, which the U.S. and British governments opposed.

Pretax profit from HSBC’s Hong Kong and mainland China operations fell 18% to $2.86 billion in the first quarter. The bank reported a $484 million pretax profit in North America.

Mr. Quinn has ruled out moving HSBC’s headquarters back to Hong Kong, where the bank was founded in 1865. But he told staff this month that executives in charge of commercial lending, banking and markets, wealth and personal banking, and asset management would relocate to Hong Kong from London this year.

Write to Simon Clark at simon.clark@wsj.com and Quentin Webb at quentin.webb@wsj.com

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