Home world HSBC steps up restructuring as ‘challenging’ global conditions hit profits


HSBC steps up restructuring as ‘challenging’ global conditions hit profits

by ace

HSBC is expected to step up costly restructuring plans after reporting a larger than expected fall in quarterly earnings and saying that business has become "more challenging" in recent months.

Interim chief executive of banking giant Noel Quinn said earlier plans – which already involved the removal of thousands of jobs – "are no longer enough."

HSBC has been facing a grim business outlook hit by the US-China trade war, as well as unrest in its main Hong Kong market and uncertainty about Brexit in the UK.

Pre-tax profits fell 18 percent to $ 4.8 billion ($ 3.7 billion) in the three months to the end of September compared with the same period last year and were below $ 5.3. billion (US $ 4.1 billion) expected by analysts.

Shares opened 3% in London.

HSBC said the drop in earnings mainly reflects lower revenue in its global banking and market division "due to reduced customer activity due to ongoing economic uncertainty."

The results included an additional provision of $ 388 million (£ 302 million) to cover compensation for the wrong sale of payment protection insurance (PPI) – as the lender, in common with other UK banks, faced a wave of late complaints before the end of August deadline.

Beijing, CHINA: A US and Chinese flag swings in front of a Beijing office building on July 9, 2007. US Secretary of State Condoleezza Rice on July 6, 2007 accused China of disrespecting the rules of global trade in its economic expansion as the US administration.

Trade War: When adults are fighting, children rush to their rooms.

There was also an increase of approximately $ 400 million (£ 311 million) in expected credit losses – a measure of loans that are likely to go wrong – thanks in part to its UK commercial bank operation and deteriorating economic conditions in Hong Kong. Kong.

Quinn said parts of the business, especially in Asia, "held up well in a challenging environment in the third quarter."

But he said in others "performance was not acceptable" – highlighting continental Europe and the US, as well as UK-based banking and global markets.

Quinn said, "Our previous plans are no longer sufficient to improve the performance of these businesses, given the milder prospects for revenue growth.

"We are therefore accelerating plans to reshape them and transfer capital for greater growth and return opportunities."

The bank said: "The revenue environment is more challenging than in the first half of 2019, and the prospects for revenue growth are milder than we expected in the half."

HSBC said it no longer expects to achieve a previous shareholder return target.

The bank said it would rebalance the worst-performing parties "and adjust the cost base according to the actions we take."

He warned that he could face significant charges in the current period as it restructures and if there is "any continuing deterioration in the revenue environment."

HSBC announced earlier this year that it planned to cut 4,000 jobs from its global workforce.

Earlier this month, the Financial Times reported that the bank was seeking an additional 10,000 papers.


Related Articles

Leave a Comment

seven + two =

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More