HSBC is reportedly slowing down hiring and encouraging staff to rein in some expenses as Europe’s biggest bank looks to cut costs.
The lender has not replaced some staff who have quit or resigned in recent months, according to Bloomberg News.
It was also reported that some of HSBC’s divisions have been told to freeze hiring entirely, although the pause is not designed to affect client-facing jobs.
Investment bankers within the group are said to have been encouraged to set up at least three client meetings each day in a bid to reduce work travel costs.
“Servicing our clients is our priority and ensuring we have the right people in the right places,” an HSBC spokesperson told City A.M. “We are working smarter and more efficiently as we leverage technology and continue to manage costs.”
The news comes as central banks across the world are expected to cut interest rates in the coming months, presenting lenders with the prospect of tighter margins and lower profits.
The European Central Bank became the west’s first major central bank to lower rates last month, with the Bank of England expected to follow in August or September and the US Federal Reserve after that.
Rate hikes propelled HSBC’s pretax profit to a record high of $30.3bn (£24.0bn) last year, soaring 78 per cent from 2022. However, its profit ticked down in the first quarter of 2024 and a further fall in profit is expected in HSBC’s second-quarter results, due later this month.
The group’s investment banking arm has also grappled with a global slump in dealmaking and capital markets activity in recent times, with the Asia-focused lender particularly exposed to China’s sluggish economic recovery from the Covid-19 pandemic.