Putting the right policy in place is one thing, executing it is another. After its misadventure in trying to become a global bank, there is no doubt that HSBC is correct in seeking to return to its business roots in Asia, especially in Hong Kong and the Greater Bay Area.
But it has been a bumpy ride, with no end in sight. Ordinarily, imposing job cuts and reducing costs on such a significant scale as it has announced in its latest overhaul should have been cheered by investors.
As it was, its share price in London lost almost 6 per cent on the day of the announcement. Shareholders have been far from impressed.
The strategic changes are the third major overhaul the banking giant has gone through since the global financial crisis more than a decade ago.
Aware that its size is having a negative impact on profitability, it aims to shed 35,000 out of a workforce of 235,000 and to offload assets worth more than US$100 billion, out of a total of US$843 billion, by 2022. It's hoped that the money saved can be more profitably deployed elsewhere.
The cost reductions target mainly its investment bank, European assets and American business. As with the previous overhauls, the goal is to focus on Asia. No wonder, the region made up half of HSBC's global revenue in 2019, and contributed almost all of its worldwide operating profit.
That was more than enough to offset losses in Europe. Last financial year's pre-tax earnings declined by a third to US$13.35 billion, the fourth slump since 2011.
Hong Kong has been a reliably bright spot. Even so, anti-government protests that started in June and the coronavirus outbreak on the mainland have taken a toll as the bank warns of more provisions this year.
Few images epitomise the political strife in this city, once a haven of stability, more than those of the two iconic lions in front of the HSBC headquarters in Central being set on fire by violent anti-government protesters.
For years, HSBC's share price has been in the doldrums. One persistent overhang has been instability at the top.
The "pivot to Asia" was started in 2015 under Stuart Gulliver, but his successor John Flint, an HSBC lifer, was forced out after just 18 months for going too slowly with the repositioning.
Noel Quinn then took over and is now carrying out the latest overhaul, yet his credibility and future are still being questioned by the market as he remains interim CEO.
It has been reported that Jean Pierre Mustier, the chief of Italian leader UniCredit, is the external front-runner for the top post. Quinn has made it known he wants the job.
The two-horse race is on. Whoever wins is likely to continue with the Asian pivot. But investors will wait and see. HSBC is right to bet on China, but as with most business decisions, execution is all.
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