HSBC is to speed up its plans to remodel the bank after its chief executive singled out the poorly-performing UK business just weeks after reports that up to 10,000 jobs could be cut.
Europe’s biggest bank stunned investors on Monday morning, as profit before tax fell 18% to 4.8 billion dollars (£3.7 billion) in the third quarter of the year.
This was significantly below the 5.3 billion dollars (£4.1 billion) analysts had forecast, according to an average compiled by the bank.
Interim chief executive Noel Quinn said that “parts of the business, especially in Asia, held up well in a challenging environment”.
However, he singled out other areas, including the UK, for criticism.
“In some parts, performance was not acceptable, principally business activities within continental Europe, the non-ring-fenced bank in the UK, and the US,” Mr Quinn said.
The boss, who took over in August after his predecessor was ousted by the board, said previous plans “are no longer sufficient” to improve these areas as revenue growth is expected to soften.
Revenue reduced by 3% to 13.4 billion dollars (£10.4 billion) over the period, the bank said in a statement to the Hong Kong and London Stock Exchanges.
“We are therefore accelerating plans to remodel them, and move capital into higher growth and return opportunities,” Mr Quinn said.
Earlier this year, the Financial Times reported that up to 10,000 jobs might be at risk at the high street bank as Mr Quinn plans to rein in costs. HSBC employs around 238,000 people.
However, the bank found a silver lining in Asia where many were concerned about the effects that ongoing protests in Hong Kong could have on the business.
Yet profit before tax rose 4% in Asia to 4.7 billion dollars (£3.7 billion) in the third quarter of 2019 as the Hong Kong branch remained “resilient”.
Despite this, the bank said it was putting aside 400 million dollars (£312 million) “to reflect the economic outlook in Hong Kong”.
August Graham is PA City Reporter.
