- Plans to cut around 35,000 jobs worldwide
HSBC, the global investment banking company, has announced profits of £3.2 billion in the half-year to June 30, down from £9.5 billion for the same period in 2019. It represents a huge 65 percent drop for Europe’s biggest bank, which was struck by coronavirus interruption and a dive in interest rates.
The London Evening Standard reports that the bank has persevered through an arid year on the markets with the London listed shares falling over 40 per cent from 595p to 342p. Though, the bank, in its update, said its future dividend policy would be looked into and included.
“Lower global interest rates and reduced customer activity have put increasing pressure on revenue, and are expected to continue to do so,” the bank said in a statement.
Noel Quinn, group CEO, who put the brakes on a wide-running repetition programme as the coronavirus grabbed hold, said: “Our first half performance was impacted by the Covid-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility.”
In any case, plans to eliminate around 35,000 jobs worldwide will be quickened, as the organization will likewise take a gander at different measures to take, “considering the new financial condition to make HSBC a stronger and more sustainable business”, Quinn said in the half-year results.
Meanwhile, HSBC, alongside other banks, consented to a Bank of England solicitation to hold dividends for investors, with the bank saying it would not make payouts or have share buy-backs until the end of 2020. Though, the company has made safe spot arrangements for credit losses of £2.9 billion in the quarter ending June 30, up from £420 million in a similar period of 2019.
As indicated in a report by the bank, the continued pressure between the US and China, and conversations over the state of Brexit will keep on affecting execution.
It stated: “Our performance in the second half of the year will continue to be influenced by the path and economic impact of the Covid-19 outbreak.
“Geopolitical uncertainty could also weigh heavily on our clients, particularly those impacted by heightened US-China and UK-China tensions, and the future of UK-EU trade relations.”
The bank, despite being headquartered in the UK, makes the majority of its profits in Asia and Quinn recognized the geopolitical hazard in the region.
He stated: “Current pressures among China and the US definitely make testing circumstances for an association with HSBC’s footprint. We will confront any political difficulties that emerge with an emphasis on the drawn-out necessities of our clients and the eventual benefits of our financial specialists.”
Frontpage September 11, 2019