HSBC to axe 40% of office space… But the bank will keep its Canary Wharf HQ despite posting a 34% drop in profits
HSBC is planning to ditch almost half its office space – but insisted it will keep its Canary Wharf headquarters in London.
Posting a 34 per cent drop in profits for 2020 to £6.3billion, the bank said it would reduce the space it occupies by 40 per cent to cut costs and allow staff to work from home more often.
And while its commitment to Canary Wharf will help to rebuild the deserted business hotspot after lockdown, chief executive Noel Quinn said offices elsewhere in the UK were likely to be axed.
Posting a 34 per cent drop in profits for 2020 to £6.3bn, HSBC said it would reduce the space it occupies by 40 per cent to cut costs and allow staff to work from home more often
The loss of such a significant employer could be highly damaging to local economies that rely on office staff to keep them alive.
Quinn said that there would be ‘a very different style of working post Covid, where there will be much more of a hybrid model of people working in the offices in a different way, but also working from home where they want to’.
He added: ‘We will always have the building here in Canary Wharf, this will be the primary London office.
‘[But] we’ll probably release premises elsewhere in London that are coming up for lease renewal over the next two to three years.’
Even before the pandemic battered profits, HSBC was trying to cut costs and focus on its more profitable businesses in Asia.
It is planning to shift capital to Hong Kong and focus on its wealth management arm there, in an effort to grab a portion of the growing number of well-off citizens.
But its efforts to grow in the East while retaining a foothold in the West have angered MPs. In an uncomfortable grilling by the Foreign Affairs Committee last month, Quinn was accused of ‘aiding and abetting one of the biggest crackdowns on democracy’.
Despite the heated criticism, Quinn said HSBC would step up its investment in Asia and the Middle East.
HSBC chief exec Noel Quinn has said HSBC would step up its investment in Asia and the Middle East
He added the bank was ‘nearing the end’ of the strategic review of its French business, which has been a thorn in its side. It is in a ‘dialogue’ with potential buyers, Quinn said.
HSBC also wants to get out of high street banking in the US, but Quinn said it was still trying to decide whether to sell that arm or close all the branches.
The bank is cutting 35,000 jobs, but would not comment on whether more redundancies would be needed due to the hit it took during the pandemic.
Although revenue fell 8 per cent last year to £35.8billion, it resumed its dividend after the Bank of England partially lifted its ban on payouts. The $0.15 per share dividend mollified investors in Asia.
Profits were squeezed by expected credit losses of £6.2billion, up £4.3billion on the year before, as HSBC thinks that the coronavirus will weigh on people’s ability to repay debts.
But HSBC’s fall in profits had little effect on the pay of its top brass. Quinn pocketed £4.2million including bonuses, up from the £2million he received for his five months’ work as an executive director the year before.
Hong Kong shame
Sports organisations from Wimbledon to The Open have been branded ‘shameful’ after failing to stand up to HSBC.
The R&A golf club, Wimbledon and World Rugby said they were ‘content’ with HSBC, in response to a letter from the Foreign Affairs Committee urging them to cut ties as China targets Hong Kong protesters.
Exiled Hong Kong lawmaker Ted Hui, whose account was frozen, said: ‘It is simply shameful to be associated with HSBC in this situation.’
Tory MP Andrew Rosindell said: ‘To say that HSBC supports ‘community’ is an affront to protesters beaten by police.’