Yeah, well. Apparently someone has been snacking between meals, and now there will be purges:
“There was a lot of talk about streamlining going on at the last strategy day, so I suppose this is a function of that,” one top 10 HSBC shareholder told Reuters. “It is a quite sprawling bank, and I wouldn’t be surprised if it has got a bit bloated here and there,” he said.
Sky News reports 10,000 cuts to save $3.5 billion. Many cuts will be in retail – shutting down 39 unprofitable markets, selling U.S. credit cards business, and shrinking U.S. retail.
A reader rightly pointed out that our accounting of how much canning your ass is worth to shareholders probably overstated the per-banker difference between GS and CS/UBS. Goldman explicitly said that it is cutting “comp and non-comp expenses,” and presumably there’s some real savings to be had outside of compensation (maybe they can pay S&P a bit less for starters?). Throwing in HSBC emphasizes the point:
Presumably a lot of that $3.5bn reduction comes from fixed costs savings from branch shutdowns etc. Or else those branches have some very well paid tellers.