HSBC posted $13.35 billion in pre-tax profits for 2019 – a near 33 percent year-on-year plunge – and said it would cut around 35,000 jobs to shrink its global workforce.

Annual results missed analyst forecasts of $19.83 billion, according to Refinitiv data, a 32.7 percent difference. The HSBC’s global headcount is expected to drop from 235,000 to around 200,000 over the next three years which represents a 15 percent cut to its workforce, though the figure has not been finalized.

Revenues climbed 4.3 percent to reach $56.1 billion but operating expenses increased 22.2 percent to $42.35 billion which included most notably a $7.3 billion goodwill impairment.

The impairment primarily includes $4 billion from HSBC’s global banking and markets unit alongside another $2.5 billion from its commercial banking unit in Europe. According to its release, it said this «reflected lower long-term economic growth rate assumptions, and additionally for [global banking and markets], the planned reshaping of the business».

Asia Shines Again

The region, where the bank derives the bulk of its revenues, once again shined despite a turbulent environment that counts a U.S.-China trade war and civil unrest in Hong Kong. HSBC posted pre-tax profits $18.6 billion in pre-tax profits in Asia, a 6 percent increase, which includes $12.1 billion from Hong Kong, a 5 percent uptick.

«We deplore all violence and support a peaceful resolution under the framework of ‘one country, two systems’,» said HSBC ’s group chairman Mark Tucker. «I am enormously proud of the dedication and perseverance of our people in Hong Kong, who have continued to support our customers to their utmost ability in spite of the difficulties they have faced.»

Tilt More

In addition to job cuts and plans to scrap about $100 billion in assets by 2022-end, which will reduce costs by $4.5 billion, the bank’s strategy is clear: tilt more towards Asia.

Its «high-level restructuring» strategy includes downsizing sales and trading, and equity research, transitioning structured product capabilities from the U.K. to Asia. In the U.S. it will cut its branch network by 30 percent and reposition as an «international client-focused corporate bank» with target retail offering. More resources will be shifted to Asia and the Middle East, though the London-based global investment banking hub will be maintained. Its retail banking and wealth management and global private banking will merge into a new division called wealth and personal banking.

«The Group’s 2019 performance was resilient, however, parts of our business are not delivering acceptable returns,» said HSBC’s group chief executive Noel Quinn. «We are therefore outlining a revised plan to increase returns for investors, create the capacity for future investment, and build a platform for sustainable growth. We have already begun to implement this plan, which my management team and I are committed to executing at pace.»