HSBC adheres to cost-cutting steps that will see it shed 35,000 jobs and spend up to $6 billion in Asia as the UK lender's profits plunged by more than 30 percent in 2020. In a presentation accompanying its earnings, the bank is investing billions in its Asian wealth management and wholesale market, it said, demonstrating a change in focus away from Europe as it shifts key executives away from London.
The pre-tax profits of HSBC of $8.8 billion were down by 34 percent, as the bank weighed provisions for credit losses from Covid-19. However, as the $8.8bn in possible loan losses were at the lower end of a previously reported range of $8bn to $13bn, this was better than analysts predicted. The bank is pushing asset towards Asia, with $6bn flagged for “growth investment” within its wealth management unit in the region over the next five years, as well as bolstering links between its commercial and investment banking units. However, there was little detail on any expected acceleration of its transformation plan. The bank is instead sticking to its target of reducing risk-weighted assets by $100bn and reducing costs to $31bn by 2022.
Noel Quinn, chief executive of HSBC said in a statement that the bank delivered “solid financial performance in the context of the pandemic – particularly in Asia – and laying firm foundations for our future growth. I am proud of everything our people achieved and grateful for the loyalty of our customers during a very turbulent year.” The bank has come under criticism in recent months for its support of a controversial new security law implemented in Hong Kong by China. The lender has drawn fire from politicians in the UK and US, with Quinn quizzed by MPs in January after HSBC froze the bank accounts of pro-democracy activists. It remains headquartered in the UK, but the move of senior executives shows a gravitational shift towards Asia.