- Lending giant HSBC detailed plans to downsize its operations in the US and Europe after annual profit fell by a third owing to a writedown in its global and commercial banking businesses.

The bank said it would cut about 35,000 jobs in Europe and the US in a bid to rein in costs by about $4.5bn and reduce assets by $100bn over the next two years.

The downsizing would result in $6bn in restructuring costs and $1.2bn of costs associated with asset sales.

The predominately Asia-focused bank said the cost cuts would allow it to target a reported return on tangible equity (RoTE) in the range of 10% to 12% in 2022.

But share buy-backs for 2020 and 2021 would be suspended given the 'high level of restructuring expected to be undertaken over the next two years,' it added.

For the year ended 31 December, pre-tax profit fell 33% to $13.35bn, even as revenue rose 4% to $56.1bn.

The slump in profit was blamed on a $7.3bn writedown related to the company's global banking and markets and commercial banking businesses in Europe.

Return on average tangible equity was down 20 basis points to 8.4%.

HSBC said it intended to sustain its dividend and maintain a CET1 ratio in the range of 14% to 15%, and planned to be at the top end of the range by the end of 2021.

'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,' HSBC said.

'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. We continue to monitor the situation closely.' At 8:09am: [LON:HSBA] HSBC Holdings PLC share price was -23.8p at 566.9p

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