Article

HSBC to shed assets, jobs in global restructuring

The London-based bank will slash $100 billion in assets and 35,000 jobs worldwide, shift much of its focus to Asia and close a large number of U.S. branches, as part of a major restructuring of its global operations.

February 20, 2020 by David Jones — Editor, Networld Media Group

London-based HSBC will shed 35,000 jobs and $100 billion in assets worldwide as part of a restructuring effort that will reduce its U.S. branch presence by about 30% and focus more resources into its Asia and Middle East operations. HSBC officials said during an investor presentation Tuesday morning that they would reposition the U.S. business into an internationally client-focused corporate bank, with a targeted retail opening.

The company will reduce operating expenses by 10% to 15% in the region, while refocusing retail operations towards globally mobile customers, and invest in digital and unsecured lending. 

"We are taking decisive action today to address those underperforming parts of the business, to redistribute capital to the growth opportunity, to simplify our business and in doing so reduce the cost base of HSBC," Group CEO Noel Quinn, said in a video statement posted Tuesday on the bank's website. "But it's for a purpose, and that purpose is to grow."

Quinn said the bank delivers about an 8% return, but the plan is to increase that return to between 10% and 12% by 2022. 

In the U.K., HSBC will focus on supporting mid-market and international corporate clients through its London hub, and plans include reducing its sales and trading and equity research business in Europe as well as transferring its structured products business from the UK to Asia. 

Also, it's restructuring the overall reporting organization of the bank, including consolidating the back and middle office into a single model for CMB and global banking. 

Geographic reports will be reduced from seven to four, and global functions and the head office will also be restructured to reflect the changes in the larger organization, according to the announcements. 

The bank is expecting to incur about $6 billion in restructuring costs and disposal costs of about $1.2 billion, with most of the expenses taking place in 2020 and 2021. 

Cover image: iStock
 

About David Jones

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David Jones is the editor of Mobile Payments Today. He is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.

Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others. He recently covered FinTech issues for PYMNTS.com.

He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation. 

He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association.