LONDON (Reuters) - HSBC will press ahead with plans to shift capital from underperforming businesses, cut costs and strip out layers of management, despite problems caused by the coronavirus pandemic.
Chief Executive Noel Quinn said HSBC would proceed “wherever possible” with a transformation plan outlined in February, but had paused most of the associated redundancies.
Europe’s biggest bank announced its latest cost-cutting plan before the coronavirus spread across Europe, leading investors to question whether HSBC would be able to carry it out.
The bank has said it will pause job cuts in order to avoid disruption and leaving staff unable to find work elsewhere, but Quinn’s re-commitment to the February strategy in a filing ahead of its annual shareholding meeting will remove some uncertainty.
Quinn has in recent weeks cut several top roles in HSBC’s investment bank and reshuffled his lieutenants, Reuters reported on Monday.
It will be the first major British lender to report first quarter earnings, on April 28, with a sharp rise in provisions against bad loans expected as borrowers struggle amid the economic lockdown.
HSBC also apologised again to shareholders for cancelling its dividend, a move that sparked widespread outrage and a possible lawsuit from Hong Kong retail investors, many of whom rely on the payouts for a significant part of their income.
“We recognise that many shareholders are deeply disappointed by the cancellation of the dividend and we profoundly regret the financial consequences (it) will have on shareholders,” HSBC Chairman Mark Tucker said in the filing.
HSBC’s annual meeting, which usually attracts hundreds of shareholders as well as protesters eager to grill the bank on issues ranging from climate change to pensions for former staff, is this year not open to outsiders.
In common with other big companies, the bank is instead holding a closed meeting, with a minimum quorum of company directors and shareholders.
A resolution by former employees of Midland Bank, which HSBC took over in 1992, to reverse the bank’s decision to claw back some of their pension allowance, was defeated in a shareholder vote on Friday.
HSBC has defended reducing the benefits once the employees reached state pension age, as an accepted UK pensions practice.
HSBC will later on Friday publish some of the more frequently asked questions by shareholders, and its answers, in place of the usual in-person interrogation its executives face at the annual meeting.
Reporting by Lawrence White, Editing by Alexander Smith and Mark Potter