35,000 jobs to go in HSBC restructure

HSBC is set to cut 35,000 jobs over the next three years and shed assets wort £77bn in a major overhaul.

The bank’s investment branch will also be slashed as part of a programme to make it leaner and more competitive.

Interim chief executive Noel Quinn summarised it: “The totality of this programme is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years.”

HSBC reported its 2019 profit before tax was £10.2bn, down from £15.3bn the previous year – a fall of 33 per cent. Some analysts had expected around £15.4bn.

The bank blamed £5.6bn in write-offs linked to its global banking and markets and commercial banking business units in Europe.

Commentators have noted that cost control measures have been leading to improved efficiency and lower cost-to-income ratio. Nevertheless, cost structures must continue to be remodelled to maintain growth and deliver opportunities into the future.

Ian Pollard of the digital transformation company, Signavio, said: “The organisation must continue to innovate and accelerate plans to improve digital performance. When measured against disruptors with customer-centric business models, there is a significant gap for banks that do not excel in the area of understanding these customer pain points.

“The winners will be the ones who are more data driven in ‘demystifying’ what their customers want and who have a solid grasp of the processes that have the greatest impact on them.

“Consumers are particularly concerned about data breaches, meaning financial institutions which struggle to secure customer data and meet regulatory requirements are facing increased scrutiny. No matter how great a service is, organisations facing a deficiency in trust will begin to lose the long-term customers they most associate with brand loyalty.

“The banking sector must enter the 21st century and ensure that data across specific processes are thoroughly examined against their risk and control frameworks.”