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Banking giant to slash 35,000 jobs as coronavirus bites

Business

The boss of HSBC has announced the bank’s biggest change in years, as it prepares to reduce its headcount by approximately 35,000 jobs around the world.

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Interim chief executive Noel Quinn said the number of people employed by the lender will go from 235,000 to 200,000 over the next three years.

It means that almost 15 per cent of the bank’s workforce will be lost.

The move comes as HSBC plans to slash more than $US100 billion from the bank’s risk-weighted assets.

Banks must hold capital against assets, such as loans, based on their riskiness, so that they can take the blow if the asset is lost.

The news came as HSBC reported a 33 per cent fall in pre-tax profit for 2019 to $US13.35 billion dollars, below analysts’ expectations.

The bank said the drop was due to “a goodwill impairment” of $US7.3 billion.

“This arose from an update to long-term economic growth assumptions, which impacted a number of our businesses,” HSBC’s annual results statement said.

The company warned that the outbreak of coronavirus had caused “significant disruption” for its business, especially in mainland China and Hong Kong.

It is headquartered in London but almost half its revenue and nearly 90 per cent of profit came from Asia in 2018, with much of that coming from Hong Kong.

HSBC said coronavirus might push down lending and transactions in the region, which could reduce its revenue.

It lowered its outlook for the overall Asian economy in 2020, mainly in the first quarter of the year.

Quinn said: “The group’s 2019 performance was resilient, however parts of our business are not delivering acceptable returns.”

The business said it is still looking for a full-time boss to replace Quinn, and hopes to do so within the next six to 12 months.

Quinn said he and his team had begun implementing a plan to “increase returns for investors, create the capacity for future investment, and build a platform for sustainable growth”.

In August the company announced 4,700 job cuts from its then workforce of 238,000.

-AAP

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