HSBC Chopping Off Assets Worth $100 Billion

On Tuesday HSBC Holding plc. (HSBC) announced it will be chopping off assets worth $100 billion with an aim of restoring its European and U.S business. In the process of trimming the assets jobs will also be lost the investment bank added.

“The totality of this program is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years,” said acting chief executive officer, Noel Quinn.

In recent times the bank has really been posting dismal results compared to its peers in the banking industry. The bank was quick to attribute this poor performance to a number of factors among them including Britain’s exit from the European Union, lower central bank’s interest rates and stagnating growth in major markets.

During this restructuring guideline, Quinn said the permanent CEO of the bank will be announced within six to twelve months. Earlier the company had said it will be naming the new permanent CEO in August.

HSBC still remains the biggest bank in Europe in terms of assets, the bank draws most of its profit from Asia. In 2019 the bank registered declined EBIT of $13.35 billion, a value way below that the $20.03 billion estimated by analysts.

During its quarterly earnings reports the bank attributed the sharp decline to write offs amounting to $7.3 billion. These write offs were linked to markets and commercial banking businesses distributed across Europe.

The bank has been under performing in the U.S for a longer time than in Europe, HSBC said it would shut down around 30% of its 224 branches in the U.S, henceforth it will only be targeting global and wealthier clients. The bank hopes these realignments will help it increase its returns.