Restructuring HSBC remains top priority for new CEO RBI to buy bonds in open market

London/Hong Kong, March 18: One of Noel Quinn’s first jobs as chief executive of HSBC will be to review the radical revamp he unveiled last month as interim boss, a senior source at the bank said.

Quinn’s decisive move to slash costs proved instrumental in securing him the top spot at Europe’s largest lender but those plans, including the axing of 35,000 jobs and shuttering of underperforming businesses, may prove difficult to implement while the world grapples with the fallout from the coronavirus pandemic.

“You can’t fire a trader in Europe over the phone when he is either working from home or taking care of a sick family member,” a second HSBC source said.

HSBC will review the social, economic and political impact of the virus, the first source said, adding that the bank could still decide to proceed with its existing plans. A spokesman for HSBC declined to comment.

Mumbai, March 18: The Reserve Bank of India will buy bonds on the open market for a total of `10,000 crore on Friday to try to keep all market segments liquid and stable, the central bank said on Wednesday.

“With the heightening of Covid-19 pandemic risks, certain financial market segments have been experiencing a tightening of financial conditions as reflected in the hardening of yields and widening of spreads,” the RBI said in a statement.

Spreads between government bonds and corporate bonds have risen in recent days because of the extreme risk aversion that has led investors to dump all assets including Indian bonds. Foreign investors have sold a net $3.48 billion worth of debt so far in March, taking total outflows to $5.04 billion in 2020, according to latest exchange data.

The high spreads have led to low trading volumes in the corporate bonds and commercial paper markets, prompting the central bank to intervene.

“Trading was almost halted due to risk aversion and this was causing a lot of illiquidity, which if allowed to continue could even lead to rollover stopping and defaults,” a source said, asking not to be named.

In its release, the RBI said it will buy four bonds due to mature between 2022 and 2025 for a total of `10,000 crore on Friday.