HSBC accelerates 35,000 job cuts amid Covid-19 profit plunge

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HSBC is to accelerate plans to cut 35,000 jobs globally after the Covid-19 crisis forced the bank to put aside another $3.8bn (£2.9bn) to cover bad debts.

The London-headquartered bank announced on Monday that pretax profits plunged more than 80% to $1.1bn (£842m) in the second quarter, down from $6.2bn (£4.7bn) during the same period last year. That is far worse than the $2.5bn that analysts had expected.

The bank, which makes most of its profits in China and Hong Kong, reported a $3.8bn loan loss charge, up from the $555m it put aside for bad debts last year. Analysts had expected the bank to take a $2.7bn provision.

See also: HSBC first-half profit plunges 65%, warns loan losses could hit $13 bln

HSBC, which already took a $3bn charge in the first quarter, expects loan loss charges linked to the Covid-19 crisis to reach $8bn-$13bn by the end of 2020. It said the estimate reflected the deterioration of the economic outlook and its poor performance in the second quarter.

HSBC chief executive, Noel Quinn, said the lender would ramp up cost-cutting plans announced in February, which were originally estimated to involve 35,000 job cuts across its global business.

“Having paused parts of our transformation programme in response to the Covid-19 outbreak, we now intend to accelerate implementation of the plans we announced in February,” Quinn said.

“We are also looking at what additional actions we need to take in light of the new economic environment to make HSBC a stronger and more sustainable business.”

Read more via The Guardian

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