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HSBC
BusinessBanking & Finance

HSBC to cut costs by US$4.5 billion, slash 35,000 jobs in third overhaul in a decade as bank’s 2019 earnings miss target

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  • HSBC to accelerate investment in Asia

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HSBC plans to reduce its sales and trading and research presence in Europe as part of overhaul. Photo: David Wong
Chad Bray

HSBC, the largest of Hong Kong’s three currency-issuing banks, plans to cut as much as 35,000 jobs, reduce costs by an additional US$4.5 billion, and shrink its investment bank in Europe and the United States, part of a broad overhaul by interim chief executive Noel Quinn to secure a permanent role in the bank’s top job.

The bank said it plans to lower its annual cost to US$31 billion or less by 2022 and expects its headcount to shrink to 200,000, representing a 15 per cent cut in its workforce. The updated strategy, which also includes several senior management changes, is the third major reorganisation in a decade for Europe’s biggest bank by assets.
HSBC, which traces its roots to Hong Kong and Shanghai during the British colonial era, said it would deploy less capital to its rates businesses, exit capital and leverage intensive product lines and reduce the size its sales and trading and equity research in Europe. It would also reduce the size of its American investment bank, particularly in fixed income, and cut its American retail branch network by about 30 per cent.
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“We believe this plan is right and appropriate at this point in time,” Quinn said on a conference call with journalists. “The most important thing is that we address the underperforming parts of the business. In addressing that, we create capacity for growth elsewhere.”

Noel Quinn, interim group chief executive officer of HSBC, during a panel discussion at the Bloomberg New Economy Forum in Beijing on November 22, 2019. Photo: Bloomberg
Noel Quinn, interim group chief executive officer of HSBC, during a panel discussion at the Bloomberg New Economy Forum in Beijing on November 22, 2019. Photo: Bloomberg
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Not everyone agreed it was the right course of action. Francis Lun Sheung-nim, the CEO of Hong Kong-based Geo Securities, said HSBC is a “shell of itself” and appears to be retreating from being a global bank to an Asian-focused lender.

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