HONG KONG – HSBC plans to cut the employment of 3 to 5 in the next three years as the Global Bank manages Western operations in rapidly growing Asian markets, especially China.
The London-based bank announced on Tuesday that it would cut $ 1.5 billion, as it faces a surge in China’s coronavirus outbreak, and Hong Kong’s most important market faces months of political turmoil in Hong Kong.
The coronavirus is causing economic disruptions in Hong Kong and mainland China that could harm HSBC’s performance this year, the bank has warned. It has lowered expectations for growth across Asia this year but added that it expected some improvement after the virus was infected. About half of the bank’s income comes from Asia.
Yet the announcement was a sign that, despite these problems, HSBC is seeing a slight upside in developed markets like Europe and the United States. (In some ways, it’s a return to HSBC’s roots: the bank was established in the 19th century as Hong Kong and Shanghai Bank.)
As part of the plan, HSBC says it will transfer more than $ 1 billion in assets in large part by scaling up spending categories. These include cutting off its network of American retail banks and consolidating some of its business lines.
The move also reflects HSBC’s intention to move away from investment banking. It will become one of several European nd lenders to reduce their ambition for business after consistently lagging behind American rivals like Goldman Sachs, Morgan Stanley and JPMorgan Chase.
Shares of HSBC in Hong Kong fell 2.5 percent on Tuesday.
With the latest company recently returning to parts of the country to shed light on the effects of the fast-moving virus, many companies have been slow to resume business activity.
On Monday, Apple lowered its sales expectations for the quarter and warned of implications for the global supply chain.
“Parts of our business are not providing acceptable returns,” says Noel Quinn, CEO of HSBC.
The bank has lost a cent percent of its profits compared to last year’s tax, as the so-called good will losses in some parts were $ .3 billion. Mr. Quinn then took the title John Flint resigns as chief executive in August
Mr Quinn said the bank had already begun an oversight, which involved closing work in the United States and Europe.
The months of democratic protests in Hong Kong “caused weight and significant disruption to the local economy,” he said. These protests have pushed Hong Kong’s economy into recession, once businesses were hit by mainland tourism.
Alexandra Stevenson from Hong Kong and Michael J. De La Merced reported from London.