Finance Monthly March 2020 Edition

11 www.finance-monthly.com NEWS - MONTHLY ROUND-UP HSBC to Axe 35,000 Staff as Profits Drop economic slowdown to impact our ex- pected credit losses in Hong Kong and mainland China”. “Longer term, it is also possible that we may see revenue re- ductions from lower lending and transac- tion volumes, and further credit losses stemming from dis- ruption to customer supply chains. We continue to monitor the situation closely”. As performance slows the bank says the impact of corona- virus could also fur- ther damage profits throughout 2020. HSBC has announced that it plans to cut 35,000 jobs over the next three years fol- lowing an overall YoY 33% profit drop and subsequent restruc- turing plans. It also said the impact of coronavirus could af- fect performance in the year ahead, espe- cially as the bulk of its yearly profits come from Asia. Noel Quinn, HSBC’s current interim CEO has confirmed the job cuts as part of their upcoming over- haul and says the overall headcount of HSBC staff is likely to drop from “235,000 to closer to 200,000 over the next three years”. Until recently, ana- lysts had predicted a 10,000 staff slash ahead, but none imagined it would amount to a 15% cut of HSBC’s total global staff. Which regions the job cuts will af- fect the most is still unclear and uncon- firmed. Profits before tax dropped 33% in 2019 to $13.3 billion (£10.2 billion). The announced 35,000 job cuts should make way for a cost reduc- tion of $4.5 billion by 2022, bringing prof- its before tax back to figures HSBC saw in 2018. In regards to the cor- onavirus outbreak, Quinn has stressed that services and staff have been af- fected in mainland China and Hong Kong, and could con- tinue over the next few months: “De- pending on how the situation develops, there is the potential for any associated