Bulletin
Investor Alert

Dow Jones Newswires

Feb. 18, 2020, 12:32 a.m. EST

HSBC Holdings profit plunges 53%, will suspend buybacks amid revamp

By Yifan Wang


Reuters

HSBC Holdings PLC’s 2019 net profit plunged 53% due to a substantial amount of goodwill impairment, the bank said Tuesday, as it plans to introduce a slew of measures to cut down costs and restructure the company.

Net profit for the year was $5.97 billion, compared with $12.61 billion in 2018, the bank (NYS:HSBC)   (LON:UK:HSBA)  said in a stock exchange filing.

Revenue edged up 4.3% to $56.10 billion, it added.

HSBC notched a goodwill impairment of $7.3 billion for 2019, primarily related to global banking and markets, and European commercial banking.

For the fourth quarter, the bank swung to a loss of $5.51 billion.

HSBC said it plans to reduce its gross risk-weighted asset by $100 billion in the next two years, as well as trim its sales and research coverage in Europe and exit G-10 long-term derivative market making in the U.K.

The bank said it will consolidate select fixed income activity in London to maximize global scale and reduce U.S. global markets risk-weighted assets by $5 billion.

HSBC added that it plans to suspend share buybacks for 2020 and 2021, due to the high level of restructuring expected to be undertaken over the next two years.

“To achieve our targets, we expect to incur restructuring costs of around $6 billion and asset disposal costs of around $1.2 billion during the period to 2022, with the majority of restructuring costs incurred in 2020 and 2021,” HSBC said.

Link to MarketWatch's Slice.