HSBC Holdings said on Tuesday it would shed $100 billion in assets, slashing the size of its investment bank and revamping its US and European businesses – in a drastic overhaul that will mean 35,000 jobs cut over three years.
BANK’S PROFITS FELL BY A THIRD LAST YEAR
The bank, which has long underperformed rivals, is seeking to become leaner and more competitive as it tries to grapple with a swathe of challenges: slowing growth in its major markets, the coronavirus epidemic, Britain’s withdrawal from the European Union as well as lower central bank interest rates.
“The totality of this program is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years,” Noel Quinn, interim chief executive, told Reuters. Some of that will be managed through natural attrition as people leave the bank, he said.
In announcing the restructuring, Quinn is auditioning for the permanent role of CEO, which the bank said in August would be announced within six to 12 months.
That was due to $7.3 billion in write-offs linked to its global banking and markets and commercial banking business units in Europe.
The bank will also reduce its sales and research coverage in European cash equities with a focus on supporting equity capital market transactions, it said.
Although it will reinvest some of the money gained from downsizing, it plans to have a reduced adjusted cost base of $31 billion or below in 2022, underpinned by a new cost reduction plan of $4.5 billion.