Dive Brief:

• HSBC plans to cut 35,000 jobs and $100 billion in assets over the next three years as it continues to navigate global uncertainties such as the impact of Brexit and COVID-19, the coronavirus.

• In its annual earnings release, the London-based bank said it will scale back its presence in the U.S. and mainland Europe, reduce the size of its investment bank and invest more in its Asian and Middle Eastern operations. 

• “The Group’s 2019 performance was resilient, however parts of our business are not delivering acceptable returns,” interim CEO Noel Quinn said in a statement. “We are therefore outlining a revised plan to increase returns for investors, create the capacity for future investment, and build a platform for sustainable growth. We have already begun to implement this plan, which my management team and I are committed to executing at pace.”

Dive Insight:

HSBC reported net profit fell 53% to $6 billion in 2019 after it took a goodwill impairment of $7.3 billion for its Global Banking and Markets and Commercial Banking divisions in Europe.

In a statement, HSBC Chairman Mark Tucker called HSBC a global bank, but one that is closely associated with mainland China, Hong Kong and the U.K. 

“Each of these continues to face major challenges,” he said. “We continue to monitor the coronavirus outbreak very closely. Our priority is always the well-being of our customers and staff, and we will continue to do all we can to ensure their safety and support them through this difficult time.”

Tucker said the bank lowered its estimate for Asia growth in 2020 as a result of the virus.

Tucker also addressed the U.K.’s exit from the European Union, adding that while the event provides some certainty, “no trade negotiation is ever straightforward.”

“It is essential that the eventual agreement protects and fosters the many benefits that financial services provide to both the UK and the EU,” he said. “At the same time as remaining close to Europe, the UK must also strengthen its links with other key partners, including the US, China and south-east Asia. We look forward to working with governments to help achieve this.”

For its U.S. operations, the bank said it plans to reduce its branch network by 30% and embark on a program to “consolidate middle and back office activities and streamline functions to simplify our US business and lower costs.”

HSBC said it estimates the restructuring will cost $6 billion with asset disposal costs of around $1.2 billion during the period to 2022. The bank said it expects to incur the majority of the restructuring costs in 2020 and 2021.