HSBC steps up cost cuts, banks on paying a divi to investors

Simon English
·1-min read
More than a quarter of UK firms say they have cut staff, according to new figures: AFP via Getty Images
More than a quarter of UK firms say they have cut staff, according to new figures: AFP via Getty Images

HSBC sets course to resume dividend payments today, saying bad loans were lower than expected and noting that its all-important Asian arm is recovering from Covid-19 faster than anywhere else.

While third quarter profits fell 46% to $2 billion on revenues down 11% to $11.9 billion, chief executive Noel Quinn was upbeat.

“We are clear on the strategic options that we need to pursue. Credit losses are lower than we thought they would be,” he said. “We are very pleased with how Asia is performing, there is evidence of a strong recovery there. We want to restart (dividends) as soon as we can.”

HSBC is in the process of cutting 35,000 jobs, a move that Quinn said is moving quicker than expected. He is “accelerating” those cuts and could find more. He said “changed working practices”, as well as “lower travel, office and printing costs” where helping to slash expenses.

Finance director Ewen Stevenson said the bank is “reassured” and “feeling more confident. When we look at Covid, in Asia what you see is a very significant recovery underway”.

Banks are barred by regulators from paying divis at the moment to protect balance sheets. The banks have been lobbying behind the scenes on this, arguing that investors won’t keep backing lenders which can’t reward shareholders.

HSBC shares opened at 320p, at which price the bank is valued at £65 billion. The stock has halved in a year.

There are around 400 staff regularly at HSBC’s Canary Wharf office out of 9000 total.