HSBC said on Friday it will press ahead with its radical plan to overhaul parts of its business, reduce costs and cut up to 35,000 jobs despite the challenges posed by the covid-19 pandemic.
In February the 155-year-old lender announced the biggest restructuring in its history, with plans to reduce its headcount worldwide by some 35,000, merge its under-performing investment arm with its retail and private banking divisions and shrink its footprint in loss-making markets including its retail banking in the US, France, Turkey and Greece.
According to Reuters the internationally-focused HSBC, which makes 90% of its profits and 50% of its revenue in Asia, will proceed "wherever possible" with the transformation plan set out in February, but Noel Quinn, the bank's CEO, said it would "pause" job cuts given the current market conditions.
The covid-19 pandemic has cast doubt over the planned sale of the bank's retail operations in France and Turkey. Many observers expect a reduction in staff and branches, with a possible creation of a "bad bank" rather than a sale.
The global giant will, however, be pushing ahead with simplifying its structure, with its wealth management, private banking and retail divisions all merged into a single, $1.4trn, entity.
On Friday the bank also apologised for its cancelled dividend payouts to retail investors--a decision that has infuriated many of its core Hong Kong-based investor group. Mark Tucker, HSBC's chairman, said: "We recognise that many shareholders are deeply disappointed by the cancellation of the dividend and we profoundly regret the financial consequences (it) will have on shareholders."
HSBC, which has been headquartered in London since its 1992 takeover of the UK's Midland Bank, is due to publish its 1Q results tomorrow, Tuesday 28 April. The bank will be the first of the big UK banks to post results since the outbreak of covid-19.
As with American lenders' results in recent days, HSBC is expected to announce a large contingency fund to cope with a vastly expanded loan book and provisions for anticipated rises in corporate defaults and bad loans.