Wealth Management

HSBC plans cost cuts as CEO scolds senior bankers

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The bank has asked some senior managers to identify where they can make potential savings including job reductions in a programme named ‘Project Oak’.

Sunday 28, April 2019

(Bloomberg) --HSBC Holdings has started a cost review that could lead to job cuts, as Chief Executive Officer rebuked top managers at a meeting in Hong Kong last month for missing revenue and cost targets.

About 400 executives attended the global conference where the CEO called out leadership for incompetence and discussed their inability to keep a rein on expenses.

HSBC’s review is in early stages and any cuts are likely to include the investment bank, which has some of the best-remunerated staff, affected staff will be informed around mid-year.

The bank, which gets most of its business in Asia, was hit by the meltdown in financial markets, which pushed investment bank revenues lower in the fourth quarter and put further pressure on the CEO to rein in costs.

The lender has been one of few global financial institutions to avoid major cutbacks recently, adding 6,530 staff last year to take its headcount to more than 235,000.

In a statement, HSBC spokeswoman, said, “Business and function lines constantly re-evaluate their needs to ensure they have the right roles, in the right locations to deliver for our customers and stakeholders.”

John Flint, HSBC’s Chief Executive Officer has pledged to keep a keener eye on expenses after a disappointing fourth quarter capped his first year in charge of Europe’s largest bank.

Flint vowed then to slow spending as he sought to deliver on a key promise to shareholders, that revenue gains will outpace cost increases, a trend HSBC refers to as positive jaws.

However, Flint failed to achieve that in his first year at the helm, in part because of the fourth-quarter equities meltdown that also inflicted pain on the bank’s biggest rivals.

The London-based lender elevated Flint last year to replace Stuart Gulliver, bringing to an end a seven-year term marked by asset sales, job cuts and a pivot toward Asia.

 

TAGS : HSBC, Project Oak, job cuts, cost cuts

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