HSBC CEO speaks of ‘deep regret’ at huge job losses during post-covid restructure

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HSBC has confirmed that 35,000 jobs are to be shed as it announced its 2020 interim results where the global financial giant reported a revenue of $3.606bn, down from $4.506bn in 2019’s first half. 

In a statement issued today announcing its plans HSBC Group CEO Noel Quinn, pictured below left, confirmed the job losses would now be implemented following a pause in its plans due the covid-19 crisis.

As reported, in February HSBC announced a substantial transformation programme to reshape its underperforming businesses, simplify its “complex organisation” and reduce costs.

In a statement, issued earlier today, Quinn said: “We are moving forward with these plans wherever we can. We have already begun combining our wholesale back office operations, and brought our retail, wealth and private banking businesses together into a single global business – Wealth and Personal Banking.

Due to the covid-19 outbreak, March, Quinn paused the redundancy programme as he said it “would have been wrong to proceed with job losses at a time of significant stress for our people and communities”.

Now, as many countries have slowed the spread of the virus and are emerging from lockdown, Quinn has confirmed that the redundancies will begin. 

‘Deep personal regret’

“I am mindful of the impact it will have for some of our people, particularly those leaving us. As necessary as these changes are, the human impact is a matter of deep personal regret to me. We will make sure that all those leaving HSBC as part of our transformation will be treated with fairness and consideration, and will receive support in finding new employment.”

Quinn added that the company will also look at “what additional actions we need to take”, in light of the new economic environment to “make HSBC a stronger and more sustainable business.”

The statement confirmed that HSBC’s wealth management revenue has fallen 20% in the first half of 2020, from a year ago.

Global private banking revenue eased slightly to $921m over the same period. The asset management business, which is listed under wealth management, saw its revenue drop 4% to $496m, the statement said.

Earnings of the $1.4tn Wealth and Personal Banking unit also took a major hit with a net operating income of $11.251bn in 2020’s first half, dropping from $12.861bn a year earlier.

It set aside $2.202bn in expected credit losses from $527m. Operating expenses climbing 3% to $7.346bn over the same period. 

The global private banking business had profits of $199m, that was higher than asset management at $148m.

The private bank reported $353m in client assets as of 30 June, with $161m in Europe, $154m in Asia and $38m in North America.

The asset management business had $521m in funds under management. This amounted to $292m in Europe, $160m in Asia, $57m in North America, $7m in Latin America, and $5m in the Middle East and North Africa.

On a group level, HSBC said its net operating income fell 9% to $26.745bn in the first half of 2020.

The bank set aside $6.858bn in expected credit losses, from $1.140bn a year ago. It had a profit after tax of $3.125bn, down from $9.937bn over the same period.

Source: https://www.internationalinvestment.net/

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