HSBC to accelerate restructuring plan as third-quarter profit tumbles 35%

In this news, we discuss the HSBC to accelerate restructuring plan as third-quarter profit tumbles 35%.

HONG KONG / LONDON (Reuters) – HSBC Holdings PLC HSBA.L on Tuesday announced that it plans to accelerate its restructuring plan, cutting costs even more than previously suggested, by shifting its model from the income generation primarily from interest rates on paid activities, and decreasing in size.

The plans were disclosed as they posted a 35% drop in quarterly profit less than expected and signaled an easing of its bad debt provisions, citing an expected improvement in the economic outlook in its major markets.

Reported pre-tax profit of Europe’s largest bank by assets was $ 3.1 billion for the quarter ended September 30, up from $ 4.8 billion in the same period a year earlier .

Profit was above the average of $ 2.07 billion analysts’ estimates compiled by the bank.

Asia-focused HSBC said it expected bad debt losses to be in the lower end of the $ 8 billion to $ 13 billion range set earlier this year.

“These latest forecasts, which continue to be subject to a high degree of uncertainty due to Covid-19 and geopolitical tensions, assume that the likelihood of a further significant deterioration in the current economic outlook is low,” he said. -he declares.

Faced with fewer options to drive revenue growth, HSBC has sought to cut costs globally and in June resumed plans to cut around 35,000 jobs it had shelved after the coronavirus epidemic.

Other measures of the lender’s global restructuring, unveiled in February, include the divestiture of its French business, which it may have to sell at a great loss, Reuters reported last month.

HSBC, which like other UK lenders stopped paying dividends earlier this year at the behest of regulators, said it would release a revised dividend policy in February 2021.

Analysts and investors are worried that the lender will cut long-term payments.

Reporting by Sumeet Chatterjee in Hong Kong and Lawrence White in London; Edited by Edwina Gibbs

Original © Thomson Reuters

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