HSBC to cut 40% of global real estate in major shake-up
HSBC is to slash its global property footprint by around 40%, the bank said this morning, as it announced a more than one-third drop in profits during 2020 as a result of the coronavirus pandemic.
The London-listed financial giant said it was looking to take significant cost-cutting measures over the coming years, including further headcount reductions in a bid to reduce operational costs by $1bn (£710m) by 2022.
As part of the savings drive, chief operating officer John Hinshaw said the bank would make significant reductions in its real estate.
HSBC is to slash its global property footprint by around 40%, the bank said this morning, as it announced a more than one-third drop in profits during 2020 as a result of the coronavirus pandemic.
The London-listed financial giant said it was looking to take significant cost-cutting measures over the coming years, including further headcount reductions in a bid to reduce operational costs by $1bn (£710m) by 2022.
As part of the savings drive, chief operating officer John Hinshaw said the bank would make significant reductions in its real estate.
“Clearly Covid has changed the way we all work over the past year, and we now have an opportunity to create a lower, sustained cost base in both corporate real estate and reduce business travel,” he said.
“We have analysed our worldwide real estate footprint and anticipate a reduction in the order of 40% over the next several years, while also ensuring our remaining real estate has a lower environmental footprint on the journey to having our operations at net zero by 2030.”
While the bank did not give country-specific details on the property cuts, it announced a significant shift in its broader focus towards Asia, zeroing in on Hong Kong, mainland China and Singapore for future investment.
This will include shifting $100bn of capital to Asia, moving a number of its global business heads from the UK to Hong Kong, its biggest market, and cutting 35,000 jobs in Europe and the US.
It comes as HSBC said profit plunged to $8.8bn last year, down from $13.4bn the previous year, after news emerged yesterday about a major reshuffle of its top executives that will see its chief financial officer, Ewen Stevenson, take responsibility for its transformation programme.
“In 2020, we experienced economic and social upheaval on a scale unseen in living memory,” chairman Mark Tucker said.
“The external environment was being reshaped by a range of factors – including the impact of trade tensions between the US and China, Brexit, low interest rates and rapid technological development.
“The spread of the Covid-19 virus made that environment all the more complex and challenging.”
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