It of course operates under the same “blessing” of historically low interest rates as Barclays. Likewise, the coming and partly unavoidable wave of business failures triggered by coronavirus means HSBC is also going to be forced to write off billions in bad loans. Last month, Quinn signalled that the figure for this year alone could be as high as £10bn.
Against this grim backdrop, the bank is attempting major restructuring and cost-cutting in a bid to preserve what returns are available.
An accelerated programme of 35,000 job cuts from a global workforce of 235,000 is inevitably undermining morale at a time of crisis.
Yet it seems all but certain that further pain is in the works. HSBC’s friends in the Barclays research team suggest Quinn will need to make a total of nearly 100,000 redundancies to meet his target of returns on equity of between 10pc and 12pc by 2022. What state HSBC morale might be in by then is anyone’s guess. For Quinn, appointed permanently in March after an odd trial period that fuelled speculation Tucker would have rather not, it is a daunting task.
Some of the changes will be overdue. Like most big banks, HSBC’s computer infrastructure requires serious investment and updating after successive managements opted to make do and mend. Technologies such as the software-as-a-service approach of Salesforce and others now offer banks a tempting shortcut to digital efficiency. Taking it in the coronavirus economy will be fraught with risks, but again, they will not be particular to HSBC.
Instead, the special worries that have sent the bank lower than during the financial crisis are Donald Trump and China. The unpredictability of the man in the White House and his battle with Beijing are stoking real fears that a new round of sanctions could cut HSBC off from the dollar. There are plenty of reasons to take this seriously. China’s human rights abuses in Xinjiang and erosion of liberties in Hong Kong continue apparently unchecked by the sanctions the US has slapped on officials.