HSBC planning to cut 10,000 more posts: Financial Times

HSBC earlier said it would axe two percent of its global workforce, or roughly 4,000 mostly management jobs. (Reuters)
Updated 07 October 2019

HSBC planning to cut 10,000 more posts: Financial Times

  • Latest cuts mostly in high-paid roles are part of a fresh cost-cutting drive by new boss Noel Quinn
  • Other lenders are also battling global headwinds

HONG KONG: HSBC is planning to lay off up to 10,000 staff, a report said Monday, just weeks after its chief executive stepped down and announced the axing 4,000 posts citing a weak global outlook.
The latest cuts mostly in high-paid roles are part of a fresh cost-cutting drive by new boss Noel Quinn as the banking titan struggles to adjust to falling interest rates, Brexit and the long-running trade war, the Financial Times reported.
“We’ve known for years that we need to do something about our cost base, the largest component of which is people — now we are finally grasping the nettle,” the paper quoted an unnamed source as saying.
“There’s some very hard modelling going on. We are asking why we have so many people in Europe when we’ve got double-digit returns in parts of Asia.”
The London-headquartered bank last month announced the shock exit of CEO John Flint after just 18 months in the hot seat but gave no reason for the decision.
At the same time it revealed it would axe two percent of its global workforce, or roughly 4,000 mostly management jobs, in a new restructuring aimed at weathering the global turmoil.
Still, its reported first-half net profit rose 18.6 percent on-year to $8.5 billion.
It is due to report third-quarter earnings at the end of October.
The cost-cutting drive is in line with other lenders who are battling global headwinds.
US banks including JPMorgan Chase and Wells Fargo have lowered their 2019 profit forecasts tied to interest rates as central banks around the world loosen monetary policy in response to a weakening global growth outlook.
Lower interest rates mean less profit on loans made by the banks, especially if they have offered higher returns on deposits to attract customers.
And last month Germany’s second-largest lender Commerzbank said it plans to cut the equivalent of 4,300 full-time posts — a tenth of its workforce — and shut 200 branches as it restructures.
Deutsche Bank has announced 18,000 job cuts and France’s Societe Generale 1,600.

WEEKLY ENERGY RECAP: Calm after the storm

Updated 2 min 43 sec ago

WEEKLY ENERGY RECAP: Calm after the storm

  • The rebound came as countries began to reopen after coronavirus lockdowns

Crude oil prices capped a fifth week of gains without the volatility that characterized much of April when prices plummeted.

Brent crude rose to $35.33 per barrel as WTI advanced to $35.49. 

The spread between Brent and WTI has also been narrowing over the last three weeks, closing last week at $1.87 per barrel. But this week closed at nearly parity.

This may point to speculators overextending in WTI Nymex futures.

While WTI crude registered its highest ever month-to-month movement, it remains about 94 percent below its level at the start of the year. And the current price is still not high enough to encourage upstream capital spending that would help to lift production.

OPEC+ producers gave the market a confidence boost by following through on commitments to crude oil output supplies cuts.

US-China trade tensions, while certainly back in full swing, did not significantly affect price movements over the week.

The average Brent price rose to $28 per barrel in May from $18 per barrel in so-called “Black April,” which was the strongest monthly gain in prices in 21 years.

The rebound came as countries started to reopen after coronavirus-related lockdowns. 

However, prices are moving in a narrow range consistent with the gradual pace of the global recovery. This is what the oil market needs.

The US Energy Information Administration reported a huge jump in the weekly crude oil inventory by 8 million barrels, which is the largest inventory build in four weeks. That brought the overall inventory up to to 535 million barrels, which while significant, did not affect oil prices.

Baker Hughes reported the ninth consecutive week for oil and gas rig declines in the US. They fell to to 301 —  683 lower than this time last year.