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News | Business | Banks: HSBC to accelerate restructuring plan to cut costs

 



People walking past HSBC signimage copyrightGetty Images

HSBC has said it will accelerate its restructuring plan, slashing costs further than previously suggested.

It came as Europe's biggest bank reported a 35% fall in quarterly pre-tax profit to $3.1bn (£2.3bn), while revenues fell 11%.

The lender, which is in the midst of cutting 35,000 jobs, did not say whether more jobs would now go.

It said it would provide details on the plan with its full-year results next February.

The bank, which does much of its business in Asia, said this quarter's revenues fell mainly because of the impact of lower interest rates, and a lower share of profit from its Saudi subsidiary.

However, boss Noel Quinn said there were some bright spots.

"These were promising results against a backdrop of the continuing impacts of Covid-19 on the global economy," he said.

"I'm pleased with the significantly lower credit losses in the quarter, and we are moving at pace to adapt our business model to a protracted low interest rate environment."

HSBC had set aside between $8bn and $13bn for bad loans as it expects more people and businesses to default on their repayments because of the Covid-19 pandemic.

However, it now says its expenses are likely to be at the lower end of that range.

In September, HSBC's share price fell to its lowest level since 1995 amid allegations that the bank had allowed fraudsters to transfer millions of dollars around the world, even after learning of the scam.

The bank has also faced recent criticism from the US Secretary of State Mike Pompeo for supporting China's controversial security legislation in Hong Kong.

Even before the Covid-19 pandemic hit, HSBC was restructuring with a plan to cut $4.5bn (£3.6bn) of costs by 2022.

At its peak, the bank employed more than 300,000 people, but since the global financial crisis, the bank has trimmed its operations significantly.

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