HSBC accelerates restructuring plans amid 35% profit drop
HSBC has announced this morning that it is accelerating its restructuring plans and increasing planned cuts.
The bank, based in the UK and Hong Kong, reported a 35 per cent drop in profits for the latest quarter, with revenues also down 11 per cent to $11.9bn.
In response to the dip, the company is increasing its restructuring targets, which it previously set earlier this year.
HSBC said that it expects to reduce its 2022 annual cost base beyond its original $31bn target, and is aiming to reduce risk-weighted assets by more than its original $100bn target
The restructure will flip its main source of income from interest rates to fee-based businesses.
This comes after 35,000 jobs were marked to be cut earlier this year.
Noel Quinn, group chief executive, commented: “These were promising results against a backdrop of the continuing impacts of Covid-19 on the global economy.
“I’m pleased with the significantly lower credit losses in the quarter, and we are moving at pace to adapt our business model to a protracted low interest rate environment.
“We are accelerating the transformation of the group, moving our focus from interest-rate sensitive business lines towards fee-generating businesses, and further reducing our operating costs.
“We also intend to increase our rate of investment in Asia, particularly in wealth, the Greater Bay Area, south Asia, trade finance and sustainable finance.
“The group’s capital and liquidity ratios strengthened further in the quarter despite the challenging economic conditions.
“A decision on whether to pay a dividend for the 2020 financial year will depend on economic conditions in early 2021, and be subject to regulatory consultation. We will seek to pay a conservative dividend if circumstances allow.”
HSBC has not yet confirmed how many jobs this could affect.
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