HSBC said Tuesday it would accelerate its restructuring plan, slashing costs further than previously suggested. The bank made the announcement as it posted a quarterly profit before tax of $3.1bn (£2.3bn) – down 35% from the same period last year, the bank’s revenues were also down 11% to $11.9bn, with $3.2bn coming from its business in Asia.
HSBC hasn’t yet said if its plan to accelerate its restructure will mean more jobs will go, the bank says it will provide a detailed plan with its full year results in February next year. HSBC first announced plans to cut 35,000 jobs in February, but put the plan on hold amid the pandemic, but after a 65% drop in pre-tax profits for the first half of the year, the bank said in August that it would accelerate the plan. It 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, the group Chief executive said however, that there were some bright spots.
These were promising results against a backdrop of the continuing impacts of Covid-19 on the global economy, 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, the group Chief executive Noel Quinn said in a statement. 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.
The bank now says its expenses are trending to 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) in cost cuts 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.