AFP, London :
Asia-focused banking giant HSBC on Tuesday axed 35,000 jobs, far more than expected, and posted slumping annual profits, as it warned over the financial impact of the deadly coronavirus.
Pre-tax profits tumbled by a third to $13.3 billion (12.3 billion euros) in 2019 from a year earlier, largely owing to a $7.3-billion write-off related to its investment and commercial banking businesses in Europe.
The London-based lender added in a results statement that it hopes to cut its global workforce by 15 percent to 200,000 staff over the next three years. Commentators had expected 10,000 job cuts.
The radical overhaul comes as HSBC streamlines operations in the United States and Europe, although no details were given on where the axe would fall.
HSBC 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 fatal new coronavirus in China. – ‘Revised’ growth plan –
“The group’s 2019 performance was resilient. However, parts of our business are not delivering acceptable returns,” said interim chief executive Noel Quinn.
“We are therefore outlining a revised plan to increase returns for investors, create the capacity for future investment and build a platform for sustainable growth.
“We have already begun to implement this plan, which my management team and I are committed to executing at pace,” Quinn added.
While its Asia business has done well in recent years – fuelled primarily by China – Europe and the US have disappointed.
Quinn, who took over as acting CEO after the shock ousting 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.
Turning to coronavirus, HSBC warned the deadly outbreak in China had impacted its outlook.
“We continue to monitor the recent coronavirus outbreak, which is causing economic disruption in Hong Kong and mainland China and may impact performance in 2020,” the bank cautioned. The restructuring plans are the biggest shake-up since 2012, when HSBC was caught up in a Mexican money laundering scandal.
The bank said it was targeting $4.5 billion in cost cuts by 2022, with restructuring costs of around $6 billion.
Many 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.
Asia-focused banking giant HSBC on Tuesday axed 35,000 jobs, far more than expected, and posted slumping annual profits, as it warned over the financial impact of the deadly coronavirus.
Pre-tax profits tumbled by a third to $13.3 billion (12.3 billion euros) in 2019 from a year earlier, largely owing to a $7.3-billion write-off related to its investment and commercial banking businesses in Europe.
The London-based lender added in a results statement that it hopes to cut its global workforce by 15 percent to 200,000 staff over the next three years. Commentators had expected 10,000 job cuts.
The radical overhaul comes as HSBC streamlines operations in the United States and Europe, although no details were given on where the axe would fall.
HSBC 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 fatal new coronavirus in China. – ‘Revised’ growth plan –
“The group’s 2019 performance was resilient. However, parts of our business are not delivering acceptable returns,” said interim chief executive Noel Quinn.
“We are therefore outlining a revised plan to increase returns for investors, create the capacity for future investment and build a platform for sustainable growth.
“We have already begun to implement this plan, which my management team and I are committed to executing at pace,” Quinn added.
While its Asia business has done well in recent years – fuelled primarily by China – Europe and the US have disappointed.
Quinn, who took over as acting CEO after the shock ousting 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.
Turning to coronavirus, HSBC warned the deadly outbreak in China had impacted its outlook.
“We continue to monitor the recent coronavirus outbreak, which is causing economic disruption in Hong Kong and mainland China and may impact performance in 2020,” the bank cautioned. The restructuring plans are the biggest shake-up since 2012, when HSBC was caught up in a Mexican money laundering scandal.
The bank said it was targeting $4.5 billion in cost cuts by 2022, with restructuring costs of around $6 billion.
Many 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.
