London, United Kingdom-based HSBC, parent to HSBC Bank USA, has announced the departure of CEO John Flint and signaled its intention to eliminate thousands of jobs to compensate for “an increasingly complex and challenging global environment.” HSBC Bank USA is still operating in turnaround mode.
According to published reports, “HSBC’s finance director Ewen Stevenson said up to 2% of the bank’s 237,685 employees could lose their jobs. He said the cuts, aimed at shaving up to 4% off HSBC’s wage costs, target senior roles and will come from a mix of layoffs and attrition as people leave for other jobs. HSBC said severance costs this year would be $650 million to $700 million, saving it around that much annually going forward.”
In a statement to the financial media…
“On outlook, we continue to progress towards our 2020 return on tangible equity target, but the interest rate outlook has softened relative to the first quarter, and geopolitical risks have heightened across many of our major markets. In response to this we’re actively managing costs and investment growth in order to respond to a more challenged revenue outlook.”
“However, one priority where we’re not on track is the turnaround of our US business. While good underlying progress has been made on costs and capital – costs were down 7% in the second quarter relative to the second quarter in 2018 and we got CCAR approval to dividend a further $1.8 billion of capital back to the Group ‒ the US revenue outlook has become more challenged in recent months. There’s been a sizable shift in US dollar interest rate expectations, so we’re now not expecting to achieve a 6% return on tangible equity in 2020. But we recognize that current returns in the US are not acceptable, and it remains a firm priority of ours to improve these.”
Look for the pace of turnaround changes to HSBC Bank USA under the guidance of the recently hired Michael Roberts, Citigroup’s 34-year veteran who served as Citigroup’s chief lending officer and global head of corporate banking and capital management.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?