HSBC job cuts: Warning as Europe’s biggest bank hit by 34% profits loss

HSBC job cuts: Warning as Europe’s biggest bank hit by 34% profits loss

Adjusted profit before tax nosedived 76 percent from the year before to £8.6billion. Meanwhile, adjusted revenue fell just eight percent from £39billion in 2019 to £35.8billion in 2020. Europe’s largest bank, which is headquartered in the UK, cut 11,000 jobs last year, and has said it will continue to make savings throughout the course of this year while also cutting staff and moving others from the continent and the US to help with its push in Asia. 

HSBC has set out a revised strategy to include more focus on wealth management in Asia, where most of its profits come from, in order to mitigate its exposure to record low interest rates in retail and business banking throughout Europe.

The financial giant has not yet detailed the total number of jobs it is planning to cut but warned its back office operations would account for most of the roles impacted.

HSBC later admitted it will probably cut a third of the ,000 roles in its finance department as part of the process.

This would take place over several years and would slash its current global office space in half as more people are able to work from home as a result of the ongoing coronavirus restrictions.

The bank did however say it will retain its headquarters in London’s Canary Wharf, although its other major office sites in the capital will be closed.

But as the weakened future profit targets were examined in more detail, London-listed shares fell by almost one percent.

HSBC chief executive Noel Quinn said the bank’s mandate last year was to “provide stability in a highly unstable environment for our customers, communities and colleagues”.

He added: “I believe we achieved that in spite of the many challenges presented by the COVID-19 pandemic and heightened geopolitical uncertainty.

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There has also been a return to dividend payments announced, which is the first since October 2019.

This comes after the Bank of England revealed all big lenders are being blocked from paying dividends or buying back shares in 2020 to conserve capital.

HSBC has revealed a cash dividend of 11p-per-share for last year and is now looking at an interim dividend for 2021.

Hargreaves Lansdown analyst Susannah Streeter said of HSBC’s current position: “Right now the bank is walking a tightrope between being seen to uphold new controversial laws imposed by Beijing and not provoking a retail consumer backlash in Hong Kong which could cause significant damage financially and in terms of its reputation.”

Last month, HSBC said it would be closing 82 of its branches throughout the UK after the coronavirus pandemic had triggered more people to use online banking.

But the bank added the branch closures were not entirely linked to lockdowns and strict restrictions that had been enforced.

This is a breaking story. More to follow…

Published at Tue, 23 Feb 2021 11:40:00 +0000