155-year-old HSBC is reorganizing its business as political challenges destabilize its main markets.
Photo: isaac lawrence/Agence France-Presse/Getty ImagesLONDON—HSBC Holdings PLC said it would cut 35,000 jobs and $100 billion in assets in the next three years as it scales back its operations in the U.S., mainland Europe and its investment bank.
Europe’s biggest bank by assets plans to invest more in its fast-growing Asian and Middle Eastern operations to boost profit. HSBC operates in more than 50 countries but makes half its revenue in Asia.
The bank said Tuesday that net profit fell 53% to $5.97 billion last year, impacted by a goodwill impairment of $7.3 billion.
HSBC’s London-listed shares were down 5.1% Tuesday morning.
The 155-year-old lender is reorganizing its business as political challenges destabilize its main markets, with uncertainty about the U.K. economy as it leaves the European Union, antigovernment protests in Hong Kong and trade tensions between the U.S. and China.
HSBC still faces substantial challenges in its key markets in the U.K., Hong Kong and mainland China, Chairman Mark Tucker said.
The bank is monitoring the impact of the coronavirus outbreak and has reduced its expectations for Asian economic growth in 2020 as a result, Mr. Tucker said.
The restructuring of the London-based bank is being led by Chief Executive Noel Quinn , who replaced John Flint in August on an interim basis. Mr. Quinn is vying for the permanent role of CEO, which the bank said will be decided this year.
“Around 30% of our capital is currently allocated to businesses that are delivering returns below their cost of equity, largely in global banking and markets in Europe and the U.S.,” Mr. Quinn said.
HSBC will be “exiting businesses where necessary,” Mr. Quinn said.
HSBC Chief Financial Officer Ewen Stevenson told journalists there will be “meaningful job cuts” in HSBC’s investment bank and headquarters in London.
The bank, which employs 235,000 people, expects to incur about $7.2 billion of costs because of the restructuring in the next few years.
Write to Simon Clark at simon.clark@wsj.com and Margot Patrick at margot.patrick@wsj.com
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2020-02-18 09:02:00Z
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