HSBC pledged to accelerate Asia’s pivoting despite rising tensions between China and the West after reporting a 30% plunge in 2020 profits due to a coronavirus pandemic on Tuesday ..
Reported profit after tax was $ 6.1 billion, with banks primarily blaming unexpected credit losses and other bad debts.
The result came when HSBC announced a new strategy that offered plans to double its attempts to win more Asian markets, the region of the world where Europe’s largest lenders make up the majority of profits. ..
The strategy will allow banks headquartered in London to invest approximately $ 6 billion to strengthen their operations across Asia, with a particular focus on targeting wealth management in increasingly wealthy regions. ..
Banks specifically mentioned markets in Southeast Asia such as Singapore, China, Hong Kong and the Middle East.
“We plan to invest in the areas where we are strongest,” CEO Noel Quinn said in a statement.
The slowdown in the global economy caused by the virus has hit financial giants hard, but HSBC has even more headaches. It is a politically unstable position as a major business conduit between China and the West.
HSBC accounts for 90% of profits in Asia, with China and Hong Kong being the main drivers of growth.
As a result, many others in their own right against the increasingly frayed relations between China and the Western nations, especially after Beijing imposed strict security laws on Hong Kong last year and cracked down on democracy supporters. Turned out to be more vulnerable than people.
HSBC has voiced its support for security legislation, a move that has led to criticism from British and US lawmakers.
Earlier this month, Quinn was summoned to freeze the bank account of a democracy activist in Hong Kong to testify in front of a British lawmaker.
At the same time, HSBC was called upon by the Chinese mass media for providing information that would lead to the arrest of Huawei’s top executives in Canada.
HSBC states that it must comply with the laws of each jurisdiction in which it operates.
But the double crisis has neatly encapsulated the delicate position that banks, which are highly dependent on China, have now found themselves.
In a statement attached to Tuesday’s results, Chairman Malcolm Tucker said, “The geopolitical environment remains difficult, especially for global banks like HSBC, which has potential potential for our strategy. We continue to pay attention to the impact. “
Despite these complications, HSBC appears to be fully entering Hong Kong.
According to Bloomberg and the Financial Times, the bank plans to move three of its top executives from London to Hong Kong in the coming months.
The trio co-leads wealth and personal banking, global banking and markets, and global commercial banking.
Bloomberg said the move meant that companies that accounted for about 95 percent of net revenue would soon run out of Hong Kong.
Other major banks are beginning to move some senior executives from Hong Kong to rival cities such as Singapore and Tokyo.
The latest strategy is only 12 months after HSBC announces a global overhaul to reduce jobs by 35,000, primarily in the less profitable European and American sectors by 2022.
Dismissals represent approximately 15 percent of the bank’s global workforce.
The HSBC wasted a year considering the sale of its French retail division, and Tuesday’s Financial Times reported that it also plans to end its consumer finance business in the United States.
Banks said Tuesday that adjusted pre-tax profits halved to $ 2.2 billion in the fourth quarter, but $ 1.8 billion thanks to lenders holding costs down as part of a major restructuring that has already begun. Exceeded expectations.
It also said it would begin paying a $ 0.15 dividend after the UK authorities lifted the payment ban last year to maintain its balance sheet during the height of the pandemic panic.
HSBC Ramps Up Asia Pivot As Pandemic Hammers Profits Source link HSBC Ramps Up Asia Pivot As Pandemic Hammers Profits