Banking

HSBC Overhaul May Be Delayed Over COVID-19

HSBC's Noel Quinn will delay restructuring due to the coronavirus

Noel Quinn has stepped into a full-time job as CEO of HSBC, and his first tasks in that job will involve strategizing around the colossal pitfalls the coronavirus has created over the past several weeks.

HSBC does most of its business in Asia, and the lender noticed the virus’ initial spread in China in January and February — but the virus has grown in size since then, causing whole countries to effectively shut down.

Quinn, a veteran at HSBC who has been serving as interim CEO for months, made a move to slash costs, which secured his position as the new head of the company.

Now, with the virus continuing to have unprecedented and unpredictable effects worldwide, Quinn’s plans, including cutting tens of thousands of jobs and closing businesses that haven’t been performing well, may face difficulties in implementation. One source said it would, for instance, be hard to fire a trader in Europe as he’s working from home or caring for a sick family member.

The plans were angling at a restructuring for the bank, amid several global social and political factors.

Now it’s back to the drawing board for Quinn, who will review the impacts of the virus at multiple levels including social, political and economic, as countries like Italy and the U.S. grapple with serious threats from the virus.

Quinn’s appointment came because the company felt it would need a permanent leader in place to deal with various aspects of the crisis. Investors felt the company was taking too long to pick a replacement for previous CEO John Flint. Ali Miremadi, portfolio manager with GAM, said Quinn would likely do well in his position based on his performance as interim leader, and that the role itself was hard to fill in general.

At least two employees of HSBC have tested positive for the coronavirus, which prompted the lender to tell employees to work from home to avoid spreading the virus.

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