Covid effect: HSBC plans to cut long-term office space by almost half


HSBC plans to cut its office space almost in half worldwide long-term as part of a cost-cutting campaign established on Tuesday, in a further sign that the pandemic could mean permanent changes in work patterns.

The financial institution aims to reduce its presence in offices by 40% in the long term, it said in a presentation to analysts where the bank referred to its meager annual results.

The firm’s executive director, Noel Quinn, specified that the reduction will be gradual as your leases come to an end and it would not include branches or the HSBC headquarters building in London’s Canary Wharf.

“We will focus on those offices with support functions and central office activities when we talk about the 40% reduction …We believe that we will achieve this through a very different work style after Covid with a more hybrid model, “added the executive.

The UK government said on Monday that home work should continue until further notice as it planned a gradual relaxation of the country’s lockdown, meaning that the company’s offices will remain virtually empty for months.

Several banks have said they will adopt a more hybrid job after most of their staff switched to working from home during the pandemic., but few have defined a specific goal to reduce space.

Meanwhile, executives at some banks, including Barclays and JPMorgan have grown cold with the idea of ​​large-scale remote work, arguing that in the long term it is affecting the well-being of staff. and it is proving to be less effective.

Bank results

In the presentation of results, the financial firm abandoned its long-term profitability objective and unveiled a revised strategy focused mainly on wealth management in Asia, after the impact of the pandemic caused its annual profits to fall sharply.

Blaming the low interest rate environment and tough market conditions, HSBC dropped its goal of achieving a return on tangible equity of 10-12%, saying it would instead aim for 10%. in the medium term.

The measures taken by the largest European bank highlight the difficult prospects for the banking sector, as low interest rates around the world are taking their toll, although the rebound in global markets has boosted prospects for the wealth management business.

Pressure on margins and mounting losses in Europe have forced HSBC to redouble its focus on Asia, which accounted for 146% of its profits in 2020, as executives look for new growth engines.

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