Business & Tech

Facing unrest in Hong Kong and coronovirus threats, global bank HSBC will cut 35,000 jobs

HONG KONG — HSBC plans to cut 35,000 jobs over the next three years as the global bank scales back its Western operations to focus on faster-growing Asian markets, particularly China.

Yet the announcement from the London-based bank on Tuesday that it aims to cut $4.5 billion in costs comes as it faces headwinds like the coronavirus outbreak in China and months of political strife in Hong Kong, one of its most important markets.

The coronavirus is causing economic disruptions in Hong Kong and mainland China that could have a negative impact on performance this year, the bank warned. It lowered expectations for growth across Asia for this year but added that it expected to see some improvement once the virus was contained. Nearly half of the bank’s revenue comes from Asia.

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Yet the announcement was a sign that, despite those issues, HSBC sees little upside ahead in developed markets like Europe and the United States. (In some ways, it is a return to HSBC’s roots: The bank was founded in the 19th century as the Hongkong and Shanghai Bank.)

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As part of the plan, HSBC said it planned to divest more than $100 billion worth of assets, in large part by scaling back divisions. That includes slashing its American retail bank network and consolidating some of its business lines.

The move also reflects HSBC’s intent to step back from investment banking. That would make it one of several European lenders to curtail their ambitions for the business after consistently lagging American rivals like Goldman Sachs, Morgan Stanley, and JPMorgan Chase.

HSBC shares trading in Hong Kong closed 2.8 percent lower.

The bank is the latest company to shed light on the impact of the fast-moving virus that has gripped China over recent weeks and led to a near nationwide economic standstill. While parts of the country are getting back to work, the reopening of business operations for many companies has been slow.

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On Monday, Apple cut its sales expectations for the quarter and warned of the impact on the global supply chain.

“Parts of our business are not delivering acceptable returns,” said Noel Quinn, chief executive of HSBC.

The bank reported a 33 percent fall in profit before taxes last year, compared with the previous year, in part because of a so-called goodwill impairment of $7.3 billion. Quinn took the helm after the surprise resignation of the former chief executive, John Flint, in August.

The bank has already begun an overhaul that involves cutting back operations in the United States and Europe, Quinn said.

Months of pro-democracy protests in Hong Kong “weighed on the local economy and caused significant disruption,” Quinn said. The protests have pushed Hong Kong’s economy into recession as businesses that once thrived from mainland tourism have taken a hit.