HSBC posted an 18 percent loss in pre-tax profits for the third quarter of 2019, compared to the same period last year, reports said. HSBC group CFO Ewen Stevenson announced plans to restructure the businesses with the greatest losses, its U.K. and U.S. businesses.
Combined, the assets make up one-third of the bank’s capital, according to Stevenson, who spoke with the publication Monday.
“Returns are very, very weak across both of those businesses,” he said. “We need to get those returns up. We haven’t yet sized what that means in terms of the restructuring.”
The quarter posted $4.8 billion in pre-tax profits, below analyst expectations, with revenue at $13.36 billion for the quarter. Shares dropped by as much as 2.8 percent following the report.
According to Stevenson, the bank’s operations in Hong Kong, where the bank is publicly listed, have remained “resilient,” although Stevenson noted some deterioration in credit portfolios, particularly among small businesses.
The bank’s deputy chairman and chief executive of Asia Pacific operations, Peter Wong, recently called for China to relax regulations to allow for more foreign banks to enter the market and obtain banking licenses.
In addition to restructuring, HSBC also plans to streamline its group operating structure in an effort to cut costs, although Stevenson did not disclose whether job cuts are a part of the restructuring plans. As CNBC highlighted, previous reports from the Financial Times said as many as 10,000 HSBC jobs could be threatened as the bank looks to cut costs, and Stevenson told CNBC in August that the bank plans to save up to 4 percent on wage costs by cutting senior-level staff.
The bank is also in the midst of searching for a new CFO following the exit of John Flint. Noel Quinn, HSBC’s global commercial banking unit lead, is at the helm as interim CEO.