HSBC's Overhaul Continues with Rising Severance Costs
HSBC's restructuring costs continue to increase as CEO Georges Elhedery presses on with the bank's overhaul, which includes staff cuts, business unit closures, and reinvestment in high-growth areas.
The bank has spent hundreds of millions of dollars on the revamp, primarily on severance costs, with $200mn spent in the third quarter, bringing the total cost for the year to $800mn.
According to the lender's third-quarter results, profits declined 14% due to a provision for a lawsuit related to Bernard Madoff's Ponzi scheme.
"We are becoming a simple, more agile, focused bank, built on our core strengths."
Author's summary: HSBC's overhaul costs rise to $800mn.
- Total cost for the year: $800mn
- Third-quarter spending: $200mn
- Profit decline: 14%