The cuts come as part of Europe’s largest bank’s larger restructuring effort from earlier this year, with HSBC looking to cut costs worldwide as the ability to boost revenues becomes more difficult.
In June, HSBC resumed its plans to cut around 35,000 jobs after the plans had been temporarily put on ice during the pandemic. The pandemic had further cut into the bank’s already dwindling profits, Reuters writes, and chief executive Noel Quinn said the cuts were necessary to help HSBC profits improve.
The bank employs 235,000 people and warned early in the pandemic that the economic effects could result in $11 billion in loans not paid back.
The restructuring is worth $7.2 billion and involved the bank’s plans to expand its business into Asia and the Middle East. Half of the bank’s revenue comes from Asia.
In August, the bank warned that the loan losses for the year could far outpace those of previous years, ballooning to as much as $11 billion, with the situation worsening due to the pandemic-riddled economy.
The bank’s debts in August were already expected to rise to $6 billion, which was six times higher than the numbers from last year as layoffs damaged customers’ ability to pay back loans. Pre-tax profits fell to $4.3 billion, which was almost two-thirds lower than what it was the previous year.
The pandemic wasn’t the only thing hitting HSBC hard — political strife between China and the West has contributed too, with the bank taking heat for backing a new law criminalizing “anti-government” movements, PYMNTS writes. Quinn responded to criticisms by saying the bank would focus on long-term needs for customers and investors in any political scenarios.
HSBC’s commercial banking business provides loans and assorted other banking services to small- and medium-sized businesses (SMBs) primarily.