HSBC PLC to slash office space but committed to Canary Wharf

PLC () said today it remains committed to its flagship London office at Canary Wharf but will cut office space elsewhere by 40% as part of its cost-saving drive.

Noel Quinn, chief executive, told analysts in a meeting after results today that the reductions would come from leases not being renewed rather than shutting branches or its London HQ.

HSBC had earlier confirmed that investment over the next five years would be shifted towards wealth and personal banking in Asia and away from Europe and the US.

Quinn added that the shift to home working during the pandemic and use of offices more flexibly would also enable it to reduce its office space.

“We believe we’ll achieve it via a very different style of working post-COVID with a more hybrid model,” Quinn said at the meeting.

“Take London, for example, we will have the building at Canary Wharf, this will be the primary office but the nature of working in the office will change.”

Quinn’s comments were a different tone to Barclays boss Jes Staley, who last week said that having people away from the office long term was not sustainable and it would be increasingly difficult to maintain the culture and collaboration of large financial institutions if people worked away.

HSBC intends to cut its workforce by 35,000 and confirmed today that senior staff in Europe will be among those shifting to Asia, where some say it is trying too hard to cosy up to China.

Shares fell 2% after the results for 2020, which were in line were expectations with a 34% drop in profits to US$8.8bn but analysts were surprised at the cut in the return in equity target from 10-12% to 10%.

A profitability measure, the bank said it was due to the low-interest-rate environment.

UBS said the fourth quarter was better than expected driven by income (NII) and reduced loan losses.

The broker has a 330p price target compared to 423p today.