The British multinational investment bank will have to sell $100 billion in assets. This is more than 2 trillion kronor. As a result, some 35,000 people will have to be laid off, which will require significant downsizing; HSBC wants, among other things, to ensure that growth in the world\’s major markets does not slow down further. Coping with the impact of low interest rates is a priority. In fact, the company\’s net income has almost halved in 2019.
2019[edit] Last year, the UK company\’s profits fell to $13.5 billion ($310 billion). That\’s a 33% drop before taxes. Net income fell 53% to US$6 billion, according to published data. Analysts had estimated last year\’s pre-tax profit at US$20 billion. The results were affected by one-time write-downs related to the investment business as well as the corporate banking business across Europe.
Going forward
the bank must respond to this situation. The company is the largest bank in Europe by assets. Therefore, savings must be initiated. Over the next three years, about 15% of its workforce, or 35,000 people, will have to be laid off, HSBC\’s interim CEO said, adding that even if there were no such fallout, some of those affected by the measures would have to leave the bank.
The plan also includes a $4.5 billion reduction in operating costs. The steps the company will have to take will be the largest in this direction since the 2008 financial crisis. Thus, the bank will sell a total of $100 billion of its assets over the next few years.
Complications from the spreading virus
British banks have not been spared from the blow of the coronavirus spreading around the world. In fact, the multinational is now facing the fact that some of its revenues are now coming from Asia. The trade war between the U.S. and China does not increase the certainty of future business. Another factor affecting the current situation is the UK\’s exit from the EU and, of course, the coronavirus outbreak.