HSBC To Cut $100 Billion In Assets, Terminate 35,000 Workers

HSBC Holdings rolled out plans Tuesday to slash $100 billion worth of assets and restructure in the US and Europe, as the bank undergoes a major facelift in years in an attempt to stay afloat.

The drastic remodeling will also mean trimming the size of its global investment banking and slash around 15 percent of its workforce, or 35,000 employees, in the next three years.

The London-headquartered lender is also cutting costs by as much as $4.5 billion as it grapples with difficulties, including Hong Kong protests, weak growth in key markets, the Brexit issue, among other factors.

The overhaul announcement comes against the backdrop of the bank's 2019 profit-before tax falling 34 percent, reeling from one-time write-offs connected to its investment and commercial banking businesses in Europe.

The totality of the restructuring is that the bank's headcount may likely go from 235,000 to near 200,000 in the next three years, Noel Quinn, interim chief executive officer, told Reuters.

Parts of HSBC's business are not delivering the returns the bank expects, Quinn stated in a note as part of their full-year earnings, early Tuesday. "We're thus outlining a revised blueprint to jack up returns for investors," he added.

Shares of HSBC had their largest decline in six months in Hong Kong and fell as much as 3.3 percent in the pre-market session. The bank warned that its 2020 forecast is dim.

Cutbacks at the bank will also extend into portions of its European and US investments, particularly in fixed income. In the US, assets linked to its trading operations will be cut almost by half under the new revamp. HSBC is also cutting its retail network by 30 percent.

The overhaul update was presented by Quinn as HSBC disclosed the process for selecting a permanent CEO was being made and that the board expects to come up with an appointment in the coming months as earlier planned.

In announcing restructuring efforts, Quinn is also presenting himself to be considered for the bank's permanent top executive position, sources said.

The largest funding facility in Europe in terms of assets, which comprises the bulk of its earnings in Asia, HSBC said profits prior to tax plunged by one-third to $13.36 billion last year, way below the average expectation of $20.03 billion by analysts.

In the US, where the bank has seen dismal growth for years, HSBC said it needed to improve on returns and would shut down about a third of its 224 branches and cater only to international and well-off customers.