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HSBC to cut 35,000 jobs and shed assets in major overhaul

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Banking giant HSBC will cut 35,000 jobs over the next three years and shed assets in a major overhaul.Some $100bn (£77bn) in assets will be cast off and the bank's investment branch slashed as it seeks to become leaner and more competitive.Interim chief executive Noel Quinn said: "The totality of this programme is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years."Image:Noel Quinn has run HSBC since the summer of 2019Sky News City editor Mark Kleinman said this would be HSBC's third major restructure in 10 years and that the under-performing investment banking business in the US and Europe would "bear the brunt of this jobs cull".He added: "This plan to cut tens of thousands of jobs is a pattern we've seen across the banking industry since the financial crisis of 2008 because ultra low interest rates for the last decade have depressed the returns and performance of big international banks like HSBC."HSBC reported its 2019 profit before tax was $13.35bn (£10.2bn), down from $19.89bn (£15.3bn) the previous year - a drop of 33%.

Analysts had expected around $20bn (£15.4bn).The bank blamed $7.3bn (£5.6bn) in write-offs linked to its global banking and markets and commercial banking business units in Europe.HSBC is Europe's largest bank by assets but makes around half of its revenue and 90% of its profit in Asia.In recent times, it has faced a number of challenges: slowing growth in its main markets, the coronavirus, anti-government protests in Hong Kong, and the UK's withdrawal from the European Union.In its results, the bank said the coronavirus, which has infected more than 70,000 people around the world, most of them in China, had significantly affected its staff and customers.Mr Quinn said: "Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains."HSBC's chief financial officer Ewan Stevenson said the bank could be forced to take $600m (£460m) in additional provisions against loan losses if the virus spread continues.He said: "There will be revenue impacts which will become progressively more acute if the coronavirus was to continue beyond the next month to six weeks."Regarding Brexit, HSBC group chairman Mark Tucker added: "Now that the UK has officially left the EU, negotiations can begin on their future relationship."This has provided some certainty, but no trade negotiation is ever straightforward.

It is essential that the eventual agreement protects and fosters the many benefits that financial services provide to both the UK and the EU."At the same time as remaining close to Europe, the UK must also strengthen its links with other key partners, including the US, China and South East Asia.

We look forward to working with governments to help achieve this."Mr Tucker said he expected growth to stabilise in 2020 but "at a slightly lower rate than in recent years", adding: "This underlines the need to make the most of the opportunities ahead."HSBC shares had fallen 6.5% by the close of trading.




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Category: A World


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