HSBC’s planned restructure that could see a loss of 35,000 jobs by 2022, is now likely to be delayed.
In March, the bank said it would combine its global markets and securities services (excluding issuer services) divisions as part of its restructure. The restructure was announced shortly after HSBC’s review of its 2019 financial performance results.
Following the bank's new quarterly results, which revealed the reported revenue was down 5 percent compared to Q1 2019, the CEO indicated that plans for restructuring would be put on halt amid COVID-19 pressures.
HSBC's CEO Noel Quinn, said: “I take the well-being of our people extremely seriously. We have therefore paused the vast majority of redundancies related to the transformation we announced in February to reduce the uncertainty they are facing at this difficult time.”
Quinn noted that the bank would press forward with the other areas of transformation with the aim of delivering a “stronger and leaner business that is better equipped to help our customers prosper in the recovery still to come".
Highlights from the bank’s Q1 report revealed that securities services tapped in at $289 million as of 31 March 2020, compared to $372 million for the same period last year. The decline of $83 million marks a 22 percent decline.
Commenting on HSBC’s Q1 2020 results, Quinn, cited: “The economic impact of the COVID-19 pandemic on our customers has been the main driver of the change in our financial performance since the turn of the year.”
“The resultant increase in expected credit losses in the first quarter contributed to a material fall in reported profit before tax compared with the same period last year.”
According to Quinn, HSBC is working closely with governments around the world to channel fiscal support to the real economy quickly and efficiently.
Prior to the Q1 results, go-live, Colin McLean, managing director of SVM Asset management, had highlighted that HSBC’s planned job cuts are “currently the biggest of the major UK and European banks, but others may be forced to accelerate cost-cutting along with impairment provisioning”.