HSBC’s $6bn structural overhaul under threat from COVID-19
A major technological restructure at HSBC could be under threat due to the COVID-19 outbreak, according to a report from the Financial Times.
HSBC announced that it would undertaking an overhaul of its group structure earlier this year, in a move that would see the consolidation of its middle and back office into a single infrastructure.
The bank also floated plans to merge its retail banking, private banking, and wealth management divisions into a single new operation, incurring costs of up to $6 billion in the process and the loss of as many as 35,000 jobs.
At the time of the announcement, interim group CEO Noel Quinn – now confirmed in the role – said that the coronavirus may impact the bank’s ambitious plans.
The FT reports that people within the bank have been briefed that should the contagion become a long-term crisis, then the restructure could be facing lengthy delays.
The restructuring had called for the bank to start exiting unprofitable markets and costly client relationships.
These measures could prove to be difficult with the bank facing both an intensely volatile global market and pressure from regulators to support business clients.
The bank’s ability to meet face-to-face with its clients has also been impacted by many countries going into lockdown, though an insider told the FT that HSBC will be continuing its preparatory work ready for when operations become more stable.