(Hong Kong) AFP: HSBC’s interim chief executive yesterday said the banking giant was underperforming in parts of Europe and the United States, as third-quarter profits slipped and the lender warned of further headwinds.
The Asia-focused behemoth has been trying to lower costs as it faces the double uncertainties caused by the grinding US-China trade war and Britain’s impending departure from the
Noel Quinn, who took over as acting CEO after the shock ouster in August of John Flint, has overseen plans to axe some 4,000 jobs, primarily away from its more profitable businesses within the Greater China region.
“Parts of our business, especially Asia, held up well in a challenging environment in the third quarter,” Quinn said in a statement attached to the bank’s latest results. “However, in some parts, performance was not acceptable, principally business activities within continental Europe, the non-ringfenced bank in the UK, and the US,”
The results statement gave no concrete details of what further restructuring may be down the line and said investors would be updated before February 2020, when the full 2019
results are released.
But Quinn, who has signalled he wants the top job on a permanent basis, hinted at more pain ahead in the coming months.
“Our previous plans are no longer sufficient to improve performance for these businesses, given the softer outlook for revenue growth,” he said.
“We are therefore accelerating plans to remodel them, and move capital into higher growth and return opportunities.”
Bloomberg News has reported that the bank may look to partially exit stock trading in some developed Western markets and will attempt to sell its French
In the results, pre-tax profit slipped 18 percent on-year to US $ 4.8 billion in July-September with the vast majority – US $ 4.7 billion -- coming from Asia,
according to the statement.
Adjusted pre-tax profit fell 12 percent to US $ 5.3 billion, net profit fell by 24 percent to US $ 3 billion and revenue slipped 3.2 percent to US $ 13.4 billion, all missing analyst forecasts.
The bank said its performance in Hong Kong -- which has been battered by nearly five months of grinding political unrest -- remained “resilient”.
HSBC is uniquely tethered to Hong Kong’s fortunes, pitching itself as a gateway to mainland China but leaving much of its core business potentially vulnerable to the city’s political chaos.