Announcing a drop in profits of 33%, HSBC is to axe 35,000 jobs globally and is still processing tens of thousands of PPI claims.
The announcements came in the bank’s annual report which revealed it had paid out £570 million in PPI compensation during the year but then set aside another £920 million after receiving a higher than expected number of complaints and PPI requests in the run-up to the claims deadline in August last year.
Almost 1.9 million claims and PPI requests were received up to the deadline. PPI information requests are last minute checks sent to the bank to see if PPI was attached to any of a client’s financial agreements over the years.
The bank still has 234,000 to work through as well as 44,000 potential full claims.
The average uphold rate for the remaining claims is expected to be 86% with an average payout per claim of £2,480. The bank has given no estimate of when it expects to finalise the remaining claims.
HSBC intends to reduce its global labour force of 235,000 to 200,000 over the next few years according to interim chief executive Niall Quinn.
The number of job losses represents around 15% of the workforce and is more than three times higher than analysts expected.
The bank currently operates in more than 50 countries across North America, Europe, the Middle East and Asia which is where it makes the bulk of its revenue.
The fall in profits to £10.3 billion has been attributed to its investment and commercial banking operations in Europe.
As part of its massive restructuring, HSBC will reduce its global assets by more than £77 million by 2022.
It also says the impact of coronavirus could further affect its operations as the disease sweeps through Asia where the bank earned half of its revenue and 90% of its profits last year.