HSBC Announces Mass Job Cuts, Huge Write-Down, Asset Sales, Halt of Share Buybacks. Warns of Coronavirus Impact on Credit Losses & Revenues in China & Hong Kong | Wolf Street

HSBC Announces Mass Job Cuts, Huge Write-Down, Asset Sales, Halt of Share Buybacks. Warns of Coronavirus Impact on Credit Losses & Revenues in China & Hong Kong | Wolf Street

Since the start of January, the coronavirus outbreak has created significant disruption for our staff, suppliers and customers, particularly in mainland China and Hong Kong,” Quinn said. “Depending on how the situation develops, there is the potential for any associated economic slowdown to impact our expected credit losses in Hong Kong and mainland China. Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains.”

HSBC’s leading role in global trade finance means it’s acutely vulnerable to the widespread disruption that’s already beginning to dislocate global supply chains as a result of China’s official reaction to the coronavirus.

“As of yet there’s no huge immediate impact,” says Andrew Rigden Green, a partner at law firm Stephenson Harwood. “But what will happen if this goes on for a long period of time, or the banks in China continue to be closed, or the correspondent banks are unable to issue export letters of credit in relation to certain sales? Then there could be failures in the trade finance chain.”

via HSBC Announces Mass Job Cuts, Huge Write-Down, Asset Sales, Halt of Share Buybacks. Warns of Coronavirus Impact on Credit Losses & Revenues in China & Hong Kong | Wolf Street