HONG KONG: HSBC on Tuesday announced further cost-cutting and restructuring pains after profits slid by a third last year and as its interim chief warned the global banking giant was still “not delivering acceptable returns”.
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, reports AFP.
While its Asia business has done well in recent years — fuelled primarily by China — its businesses in Europe and the United States have disappointed.
Noel Quinn, who took over as acting CEO after the shock ouster in August of John Flint, has been tasked with overhauling the sprawling international bank, which spans more than 50 countries but makes the vast majority of its profit in Asia.
On Tuesday, HSBC said a 33 percent drop in annual profits last year compared to the $19.89 billion it made in 2018 was largely down to a $7.3 billion one time write-off related to its investment and commercial banking businesses in Europe.
It also reported a loss before tax of $3.9 billion in the fourth quarter of 2019.
The bank announced a $4.5 billion cost reduction proposal and gave fresh details on plans to overhaul its more underperforming areas, particularly its businesses in the United States and Europe.
“The Group’s 2019 performance was resilient, however parts of our business are not delivering acceptable returns,” Quinn said.
HSBC’s Hong Kong-listed shares fell 2.2 percent, outstripping losses on the Hang Seng.Last year HSBC announced plans to axe some 4,700 jobs, primarily outside of its more profitable businesses within the Greater China region.
Tuesday’s statement gave few concrete details but further job losses look likely in an organisation that employs some 240,000 people globally.