HSBC plans to cut 10,000 more posts

The Korea Times - - WORLD BUSINESS -

HONG KONG (AFP) — HSBC is plan­ning to lay off up to 10,000 staff, a re­port said Mon­day, just weeks af­ter its chief ex­ec­u­tive stepped down and an­nounced the ax­ing 4,000 posts cit­ing a weak global out­look.

The lat­est cuts mostly in high-paid roles are part of a fresh cost-cut­ting drive by new boss Noel Quinn as the bank­ing titan strug­gles to ad­just to fall­ing in­ter­est rates, Brexit and the long-run­ning trade war, the Fi­nan­cial Times re­ported.

“We’ve known for years that we need to do some­thing about our cost base, the largest com­po­nent of which is peo­ple — now we are fi­nally grasp­ing the net­tle,” the pa­per quoted an un­named source as say­ing.

“There’s some very hard mod­el­ing go­ing on. We are ask­ing why we have so many peo­ple in Europe when we’ve got dou­ble-digit re­turns in parts of Asia.”

The Lon­don-head­quar­tered bank last month an­nounced the shock exit of CEO John Flint af­ter just 18 months in the hot seat but gave no rea­son for the de­ci­sion.

At the same time it re­vealed it would axe two per­cent of its global work­force, or roughly 4,000 mostly man­age­ment jobs, in a new re­struc­tur­ing aimed at weath­er­ing the global tur­moil.

Still, its re­ported first-half net profit rose 18.6 per­cent on-year to $8.5 bil­lion.

It is due to re­port third-quar­ter earn­ings at the end of Oc­to­ber.

The cost-cut­ting drive is in line with other lenders who are bat­tling global head­winds.

US banks in­clud­ing JPMor­gan Chase and Wells Fargo have low­ered their 2019 profit fore­casts tied to in­ter­est rates as cen­tral banks around the world loosen mone­tary pol­icy in re­sponse to a weak­en­ing global growth out­look.

Lower in­ter­est rates mean less profit on loans made by the banks, es­pe­cially if they have of­fered higher re­turns on de­posits to at­tract cus­tomers.

And last month Ger­many’s sec­ond-largest lender Com­merzbank said it plans to cut the equiv­a­lent of 4,300 full-time posts — a tenth of its work­force — and shut 200 branches as it re­struc­tures.

Reuters-Yon­hap

A logo of HSBC at its head­quar­ters in Kuala Lumpur, Malaysia, is seen in this Aug. 6 file photo.

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