HSBC (0005) is reducing staff numbers at its China digital wealth business Pinnacle by nearly half, or about 900 people, two sources said, a sharp reversal of the bank's ambition for the unit as part of its expansion plans in that country.
Pinnacle was launched in 2020 and sells insurance and fund products through a digital platform in China.
It employed about 2,100 people at two of its main units as of the end of June last year, according to Reuters' calculations based on company disclosure and official business records.
The reversal underscores the challenges the Asia-focused bank faces to boost growth and profitability in China at a time when it is slashing costs to boost returns.
Reuters reported in October that Europe's largest lender by assets earlier last year started probing staff compensation structures and whether suppliers had inflated expenses, contributing to a sharp spike in costs that outpaced revenue at Pinnacle.
The staff reduction involves layoffs, natural attrition and transfers to other units within the banking group in China, said the two sources.
Meanwhile, Mercedes-Benz and its subsidiaries are planning to cut up to 15 percent of the automaker's workforce in China, mainly within its financing and sales units, as the German manufacturer faces intensifying competition in the world's largest car market, sources said.
In other news on China, Blackstone is in advanced talks to sell three logistics projects in the mainland to Ping An Insurance (2318), according to people familiar with the matter, in a major exit from the business amid rising appetite among domestic investors. The US firm plans to offload the real estate in the China Greater Bay Area to Ping An Life Insurance for about 2.7 billion yuan (HK$2.89 billion), the people said.
Agencies
