HSBC To Restart Restructuring, Eyes Deeper Job Cuts

The biggest reorganization in HSBC’s history could get even larger as more cuts are requested by the board following the economic fallout from the worldwide coronavirus pandemic.

In February, the 155-year-old lender — the biggest in Europe — announced that it would cut 35,000 jobs in a reduction of U.S. and European businesses. The bank employs 235,000 people and is going through an estimated $7.2 billion restructuring in the next few years. 

It is also planning to further invest in growth areas like Asia and the Middle East. Half of HSBC’s revenue comes from Asia.

HSBC has said that it is worried it could be weighed down by $11 billion in bad coronavirus loans, according to a Monday (May 25) report in the Financial Times (FT).

The board is asking for more changes and is pushing for the restructuring to begin. Further, some businesses on the cusp are being probed again, senior figures at the bank told FT. 

A source familiar with the matter told FT that the board is asking for a new restructuring strategy “sooner rather than later.”

HSBC’s U.S. business — east-coast retail with trading and transaction banking operations — is being examined as management determines if it can survive. Last year, the bank was planning 50 new retail outlets in the U.S., a report in American Banker said.

A U.S. sale “is possible, but it’s very early in terms of making that decision,” the source told FT. “What HSBC needs to understand is, for better or worse, their opportunity is in China.”

“We have to have a business there [the U.S.], there’s no question of that, but the shape we’ve got to look at again,” another source said.

The restructuring was originally delayed due to the pandemic. In March, Noel Quinn started as CEO of HSBC, and among his first tasks was to cut costs and come up with a strategy for coronavirus-related losses.