By Simon Clark and Margot Patrick
HSBC Holdings PLC said it will scale back operations in the U.S., mainland Europe and its investment bank after net profit fell 53% to $5.97 billion last year.
Europe’s biggest bank by assets said Tuesday that it plans to cut 35,000 jobs and $100 billion of assets in the next three years and invest more in its fast-growing Asian and Middle Eastern operations to boost profit. HSBC operates in more than 50 countries but makes half its revenue in Asia.
The 155-year-old lender is reorganizing its business as political challenges destabilize its main markets, with uncertainty about the U.K. economy as it leaves the European Union, antigovernment protests in Hong Kong and trade tensions between the U.S. and China.
HSBC “continues to face major challenges” in its key markets in the U.K., Hong Kong and mainland China, Chairman Mark Tucker said in a statement. He said the bank is closely monitoring the impact of the coronavirus outbreak and has reduced its expectations for Asian economic growth in 2020 because of it.
The restructuring of the London-based bank is being led by Chief Executive Noel Quinn, who replaced John Flint in August on an interim basis. Mr. Quinn is vying for the permanent role of CEO, which the bank said will be decided this year.
“Around 30% of our capital is currently allocated to businesses that are delivering returns below their cost of equity, largely in global banking and markets in Europe and the U.S.,” Mr. Quinn said in the statement. HSBC will be “exiting businesses where necessary,” he said.
The bank, which employs 235,000, expects to incur about $7.2 billion of costs because of the restructuring in the next few years.
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(END) Dow Jones Newswires
February 18, 2020 03:43 ET (08:43 GMT)
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