Audio By Carbonatix
HSBC has said it will cut around 35,000 jobs as it announced profits for 2019 fell by 33%.
The bank said it was targeting $4.5bn (£3.5bn) of cost cuts by 2022 as part of a major restructuring.
Interim Chief Executive of HSBC, Noel Quinn, said the bank would scale back its headcount from 235,000 to around 200,000 over the next three years.
HSBC, which makes the bulk of its revenue in Asia, reported annual profit before tax of $13.35bn (£10.3bn).
It said the fall in profits was mainly due to $7.3bn in write-offs related to its investment and commercial banking operations in Europe.
The 35,000 job losses are deeper than expected, and represent about 15% of the workforce. Analysts had expected a figure of around 10,000 job cuts.
The bank currently operates in more than 50 countries across North America, Europe, the Middle East and Asia. It employs more than 40,000 people in the UK.
Some of the cutbacks will extend to HSBC's European and US investment banking businesses.
"I think they were too optimistic about their chances of their success in investment banking," Peter Hahn, banking expert and former dean of the London Institute of Banking & Finance, told the BBC's Today programme.
"The reality is that the biggest investment market in the world is the US, and if you're not big in the US in investment banking it's pretty tough to succeed in that business - and they're not."
The strategy overhaul comes as economic growth is slowing in HSBC's major markets. Asia now accounts for about half of HSBC's revenue and 90% of profits.
The bank is also facing the impact of the coronavirus, the UK's protracted withdrawal from the European Union and historically low interest rates around the world. It will be the UK-based bank's third overhaul in a decade as it attempts to lift its profits.
Mr Quinn told Reuters that the restructuring would mean "that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years".
The 57-year-old HSBC veteran was appointed interim chief executive in August last year following the ousting of John Flint. HSBC reiterated that it expects to make a permanent appointment within the next six to 12 months.
Addressing the impact of coronavirus, HSBC said the full effect had not been fully accounted for in its latest earnings, raising the possibility that it could increase the amount it expects the outbreak to cost the bank.
HSBC will also reduce the assets it owns by more than $100bn by the end of 2022 as part of sweeping reforms.
Latest Stories
-
GH¢1.7bn GoldBod loss misconstrued – IEA
15 minutes -
Mahama unveils Bawku Revitalisation Fund Committee
26 minutes -
Christians urged not to hide their gifts for church development
37 minutes -
Deputy AG punches holes in Hannan’s counsels’ letters, medical reports
47 minutes -
Field cashier of Cooperative Credit Union remanded for stealing
58 minutes -
Ghana Armwrestling Federation engages Egyptian Ambassador over sports collaboration
1 hour -
NSMQ 2026: Augusco declared winners, book quarter-final spot after Anlo, Kumasi High walk off
1 hour -
Democracy Cup 2026: Winner to play in the United States in May 2027
2 hours -
NSMQ 2026: St. John’s Grammar knocks Mpraeso SHS off seeded spot, advances to quarter-finals
2 hours -
Rashid Pelpuo welcomes new role, thanks Mahama for keeping him in government
2 hours -
Mahama inaugurates committee to oversee GH¢1bn Bawku Revitalisation Fund
2 hours -
Berko’s US conviction does not automatically establish Ghana bribery claims – OSP
2 hours -
Mahama sets GH¢1bn Bawku revitalisation plan in motion
3 hours -
‘I assure the President of my unwavering loyalty’ – Brogya Genfi after new appointment
3 hours -
US-tested evidence could strengthen OSP’s case against persons of interest in Asante Berko case – Kpebu
3 hours