HSBC Holdings is slowing down hiring and asking investment bankers to rein in their travel and entertainment expenses as outgoing chief executive officer Noel Quinn looks to curb costs at Europe’s largest lender.
The bank in some cases is not replacing staff who have left or resigned in recent months, according to sources familiar with the matter. Some businesses have been told to pause hiring altogether, though the freeze is not meant to impact client-facing roles, according to one of the sources, who asked not to be named discussing personnel information.
Investment bankers have been encouraged to set up at least three client meetings a day in order to make the most of work travel, the sources said. Employees in some divisions were reminded of some of the expectations on work travel at a company town hall in recent days, they said.
“Servicing our clients is our priority and ensuring we have the right people in the right places,” HSBC said. “We are working smarter and more efficiently as we leverage technology and continue to manage costs.”
HSBC’s belt-tightening is the latest sign that lenders are starting to prepare for central banks around the world to begin to cut interest rates in the coming months. That would end an era of stubbornly high rates that fuelled the profits of large, global banks such as HSBC in recent years.
For his part, Quinn is also readying the lender for a new chief executive after announcing he plans to step down earlier this year. The company’s board of directors is aiming to wrap up a search for his successor in the next few weeks.
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Until then, the 37-year veteran of the bank is trying to shore up the lender’s finances in whatever way he can. When it reports second-quarter earnings later this month, HSBC is expected to report revenue of US$16.1 billion, which would be down 4.9 per cent compared to a year ago. Profits are also expected to drop.
Within investment banking, HSBC has not shied away from more extreme measures to rein in costs as that business battles an industrywide slump in dealmaking and capital markets activity. The London-based lender dismissed around a dozen bankers across its investment banking division in Asia in April.
The company’s dealmakers have struggled as activity in Hong Kong and China, the company’s core markets, has been especially sluggish as the world’s second-largest economy struggles to find a firm footing post-pandemic. BLOOMBERG
