HSBC announced a radical overhaul on Tuesday, including plans to slash 35,000 jobs and slim operations in the United States and Europe, after profits slid by a third last year. The Asia-focused lender has been trying to lower costs as it faces a multitude of uncertainties caused by the grinding US-China trade war, Britain’s departure from the European Union and now the deadly new coronavirus in China. While its Asia business has done well in recent years fuelled primarily by China Europe and the US have disappointed.
Noel Quinn, who took over as acting CEO after the shock ouster in August of John Flint, has been tasked with transforming the sprawling international bank, which spans more than 50 countries but makes the vast majority of its profit in Asia.
“Parts of our business are not delivering acceptable returns. We are therefore outlining a revised plan to increase returns for investors,” Quinn said. He later told Bloomberg News that the global headcount would be cut from 235,000 to 200,000 over the next three years, although no details were given on where the axe would fall.
The restructuring plans are the most ambitious since 2012 when HSBC was caught up in a Mexican money-laundering scandal. HSBC’s shares slid 2.2 percent in Hong Kong, outstripping losses in the broader market.
The bank said it was targeting $4.5-billion in cost cuts by 2022, with restructuring costs of around $6-billion. Much of the cutbacks will be in the European and US investment banking sectors, while units in more profitable Asia and the Middle East would be bolstered.
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Source: eNCA
