Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

This revamp will be different, says HSBC boss; staff not so sure

Stock Markets Feb 19, 2020 01:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

By Sumeet Chatterjee and Sinead Cruise

HONG KONG/LONDON (Reuters) - Noel Quinn, the interim chief executive of HSBC (L:HSBA), says this time things are going to be different.

Unveiling the bank’s third overhaul since the financial crisis, Quinn told Reuters this week that the latest revamp would be less reliant on external factors, such as global interest rates and China's economy.

"I believe this plan is predicated on three things we can control, which are costs, simplification of the business, and capital efficiency, rather than being dependent on revenue growth assumptions influenced by the macroeconomic environment," he said.

Investors and HSBC employees aren't convinced.

In a call with staff on Tuesday, Quinn and Chief Financial Officer Ewen Stevenson were put on the defensive over the bank's commitment to the overhaul given that Quinn, the man unveiling it, has not been made permanent.

"Internally, expectations had built up in the run up to the strategy update that Quinn will be confirmed as the group CEO," said a person with knowledge of the call.

"But the way the whole thing is being handled ... it has created more confusion about the strategy and whether the bank will stick to it for the next three years even if there is a change at the top."

HSBC's shares dropped 6.6% on Tuesday to their lowest level in more than three years after the bank, which has struggled to keep pace with leaner and more focused rivals, said it would suspend buybacks for two years to pay for the restructuring.

Stevenson told employees that even if the markets didn't have much conviction in the execution of the strategy, HSBC staff would have to rally behind management to see it through.

HSBC declined to comment.


The London-headquartered bank, which makes 90% of its profit in Asia, is shrinking its investment bank, cutting 35,000 jobs and revamping its U.S. and European businesses, to remove $4.5 billion in costs.

HSBC veteran Quinn is auditioning for the permanent role of CEO, which the bank said in August would be announced within six to 12 months.

"This is a significant restructuring which is being driven by an interim CEO who may not be the person that delivers it," one of the bank's 20 largest investors told Reuters, declining to be named in line with his firm's media policy.

HSBC's Hong Kong shares (HK:0005) dropped 1.3% on Wednesday, while the London stock finished up 1.3%.

Against a backdrop of lower global growth and depressed interest rates, a second investor among HSBC's 20 largest shareholders said he was disappointed the bank was running hard to stand still.

While withdrawing from investment banking businesses sounded like a good idea, analysts pointed out that exits were often expensive and complicated, and could lead to disposal losses greater than the $1.2 billion HSBC has set aside.

"They are having to do a lot of heavy lifting and all this restructuring just to hit the targets they had before. I know there might be disappointment among the workforce but I'm not sure management have much of a choice," the investor said.

"I think once they do this, they are going to have to do it again. While this low interest rate environment persists, they will have to keep hacking away at the cost base. It's going to be relentless."

This revamp will be different, says HSBC boss; staff not so sure

Related Articles

Former Deutsche Bank co-CEO Anshu Jain dies
Former Deutsche Bank co-CEO Anshu Jain dies By Reuters - Aug 13, 2022 2

(Reuters) -Anshu Jain, a top finance executive best known for helping German lender Deutsche Bank AG (NYSE:DB) take on the largest Wall Street firms, died overnight on Saturday...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email