HSBC’s CFO Ewen Stevenson said the bank plans to restructure its loss-making businesses after announcing an 18% year-on-year drop in pre-tax profit in Q3 on Monday.
The Hong Kong-listed bank reported pre-tax profit of US$4.8 billion, compared with the US$5.3 billion average of the banks’ analyst estimates.
The CFO was quoted as saying in an interview with CNBC that HSBC is seeking ways to reshape its non-ring-fenced bank in the United Kingdom and its US business, which, together account for just under a third of HSBC’s capital.
Ring-fencing is a rule by which banks in the UK are required to separate their retail business from their riskier wholesale and investment banking business.
In addition, HSBC’s US retail banking business which booked a loss of US$189 million in the first nine months of 2019 has struggled for years against much bigger domestic rivals.
According to the report, Stevenson said the bank is also trying to reduce complexity in its group operating structure to achieve higher efficiency.
While declining to comment on an earlier report by Financial Times that the bank might cut 10,000 jobs, the CFO was quoted as saying that the bank’d take some material action against those weak businesses.
The bank’s interim CEO: Performance in Hong Kong resilient
Despite the missed profit estimate and the weak performance of the operations in the US and the UK, HSBC said it made most of its profits from Asia where profit before tax rose 4% to US $4.7billion in the period.
“Resilience” in Hong Kong” is the reason for Asia’s performance according to the bank’s interim CEO Noel Quinn, despite the protests in the city in the past few months.
According to the CFO in the CNBC report, central banks’ easing policies are the biggest challenge while Brexit and the protests in Hong Kong have proved to be more complex than what the bank thought before.