HSBC Announces Reorganization as Part of Third-Quarter Earnings Report
HSBC denies preparations for potential division
HSBC, one of the world's largest banking and financial services organisations, has announced a pending reorganisation as part of its third-quarter earnings results. The reorganisation aims to streamline and simplify the bank, as stated by Georges Elhedery, the CEO of HSBC.
The bank's third-quarter profits increased by 10% to $8.5 billion, but the costs edged up 2% year-over-year to $8.1 billion. The strong performance in wealth and wholesale banking contributed to the revenue increase, with the bank's operations generating $17 billion, a 5% year-over-year climb. However, net interest income dropped 17.4% year-over-year to $7.6 billion.
To achieve its objectives, HSBC will realign along four pillars. Hong Kong operations will become a stand-alone silo, and parts of two other pillars will be divided into "Eastern markets" and "Western markets". The bank will also continue to sell off assets it no longer considers core and undergo a "selective review", which could lead to exits from some markets.
The reorganisation comes amidst questions about the future of HSBC's Mexico operations, with Alex Potter, an analyst at abrdn, expressing concerns. Meanwhile, Andrew Harper, Epworth's chief responsibility officer, criticised HSBC for removing Celine Herweijer from the executive committee, stating that it is a signal of the bank's focus on profits over climate action. HSBC confirmed that Herweijer, the bank's chief sustainability officer, has been dropped from its executive committee.
As part of the reorganisation, HSBC announced a share buyback of up to $3 billion and an interim dividend of 10 cents per share. The bank will provide more details on the restructuring in February, when it announces its annual results. The new CFO of HSBC appointed under the restructuring program is not explicitly mentioned in the provided search results.
Despite the reorganisation, HSBC remains committed to supporting the commitment to net zero. The bank's operations will continue to reflect this commitment, as it navigates through this transformation. The cost savings from the reorganisation are an ancillary benefit, with the primary focus being on streamlining and simplifying the bank's operations.
In conclusion, HSBC's third-quarter earnings report was marked by a significant reorganisation announcement. The bank aims to streamline its operations, realign its structure, and potentially exit some markets. While this move has raised questions and concerns, HSBC remains committed to its net zero goals and aims to provide more details in February.
Read also:
- Planned construction of enclosures within Görlitzer Park faces delays
- Controversy resurfaces following the elimination of diesel filter systems at Neckartor: A renewed conflict over the diesel restriction policy
- Foreign financial aid for German citizens residing abroad persists
- Ukraine experiences a transformation in overseas money transfers
