- By 2022, annual spending will be reduced by $ 4.5 billion
- Recession in US Europe Businesses
- 35,000 people will lose their jobs in three years
- Global Private Banking Unit will be merged into Retail Banking Unit
HSBC plans to cut operations due to prolonged challenge London-based HSBC Holdings has decided to cut annual costs by $ 4.5 billion and eliminate assets worth $ 100 billion by 2022.
The company, which plans to cut operations in the US and Europe, has said its business in Hong Kong will be bad this year due to the coronavirus infection. The move is to reduce the size of the investment bank as part of a restructuring of US and European business. In a nutshell, HSBC’s new plans will lose 35,000 jobs over the next three years. The bank, which has been facing challenges from rivals for a long time, is cutting back on spending and fighting down rivals.
In addition to the competitive market, growth in all of the bank’s major markets was slowing, with the Corona plague and Britain’s withdrawal from the European Union leading to lower interest rates. HSBC Holdings’ interim chief executive Noel Quinn said the number of employees will be reduced to 2,00,000 in the next three years as part of the bank’s new reform plan. Noel added that the bank is in the process of appointing the CEO on a regular basis. Last August, the bank announced it would announce its new CEO in six to 12 months.
HSBC, Europe’s largest bank with assets, had a good return from Asia. Last year, however, the company’s profits fell by a third to $ 13.35 billion. In the US, the situation is not the opposite. HSBC’s performance in the US has been poor for years. As part of its reform of US operations, a third of the 224 branches will be shut down. International and affluent customers will no longer be targeted. As part of simplifying the bank’s operations, it aims to combine the retail banking and wealth management business with global private banking operations to become one of the largest wealth management businesses in the world.
The global investor banking hub will remain in London as part of strengthening investment in Asia and the West Asian region. The move, however, is to pull out of business in Europe.