HSBC: unveils new strategic plan after quarterly loss
(CercleFinance.com) - HSBC said on Tuesday that its performance was "resilient" in 2019, but pointed out that parts of its business are not delivering "acceptable returns," which prompted the British bank to outline a revised strategic plan.
This morning the group reported a fourth-quarter pre-tax loss of 3.9 billion dollars, impacted by a goodwill impairment of 7.3 billion dollars, partly due to the reshaping of its global banking and markets (GB&M) business.
Alongside the publication of these results, HSBC has updated investors on its plans to improve the group's returns by 2022 through the reduction of capital and costs in underperforming businesses.
To achieve its targets, HSBC expects to incur restructuring costs of around 6 billion dollars and asset disposal costs of around 1.2 billion dollars up until 2022, with the majority of restructuring costs incurred in 2020 and 2021.
The lender also said it plans to suspend share buy-backs for 2020 and 2021, given the high level of restructuring expected to be undertaken over the next two years.
One analyst said that the most striking point of the publication was that this major restructuring could lead HSBC to lay off up to 35.000 employees in the next three years.
"With significant restructuring risk - we remain cautious on near term trading," another analyst said.
Unsurprisingly, HSBC shares were down 4.8% on the London Stock Exchange following the report.
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