HSBC says it will cut jobs to save money and focus on generating profits in Asia after reporting a 34% drop in its annual pre-tax profits to £ 6.2 billion in 2020.
Europe’s largest bank revealed revised strategy to put more emphasis on wealth management in Asia, where it earns most of its profits, to mitigate exposure to record interest rates in the bank retail and business in Europe.
UK-headquartered HSBC, which cut 11,000 jobs in 2020, said it would continue to cut corners this year as it cut some employees and relocated others from Europe and from the United States to help the Asian push.
The group did not put a figure on the total number of job cuts it was targeting but said back office functions would account for the bulk of the positions affected.
HSBC later admitted that it plans to cut a third of its 7,000 finance staff as part of the process, but over several years, and would cut its current global office space in half as more people can work at home due to coronavirus restrictions.
The company said it will keep its headquarters at Canary Wharf in London, but will give up its other major office sites in the city.
It only revealed last month that another 82 branches in the UK were to be closed as its business moves online.
HSBC reported that loan losses in Europe resulting from the COVID-19[female[feminine The pandemic was a key factor in the transition to Asia – with the move warmly welcomed by shareholders as its shares traded in Hong Kong were up to 6% higher.
The mood was helped by a return to dividend payments – the first since October 2019 after the Bank of England blocked all major lenders from paying dividends or buying back shares in 2020 to conserve capital.
He revealed a cash dividend of 11p per share for 2020 and said he was considering an interim dividend for the current year.
However, London-listed stocks fell almost 1% as weakened future earnings targets became more focused.
Managing Director Noel Quinn said the company’s mandate in 2020 was to “provide stability in a very volatile environment for our customers, communities and colleagues.”
He added: “I think we have achieved this despite the many challenges posed by the COVID-19 pandemic and heightened geopolitical uncertainty.
“Our employees have provided an exceptional level of support to our clients under very difficult circumstances, while our balance sheet and strong liquidity have reassured those who rely on us.
“We achieved this while delivering a strong financial performance in the context of the pandemic – particularly in Asia – and laying a solid foundation for our future growth.”