HSBC plans to increase spending in 2024 as the bank invests in technology and its people.
Costs are expected to grow to $31.2 billion, up 5% compared to 2023 due to higher technology spend and an increase in staff compensation, according to the bank’s fourth-quarter 2023 earnings release.
HSBC plans to invest in technology for the following uses:
- Seamless customer experience;
- Security;
- Modernization of the core; and
- Automation at scale.
BIGGER PICTURE: The bank’s tech spend accounts for 22% of its overall costs, up from 16% four years ago, Chief Executive Noel Quinn said during today’s earnings call.
“We’re trying to remain disciplined on cost and change the nature of the costs to be a much more strategic cost component in driving the future enhancements for customer propositions and efficiencies,” Quinn said.
BY THE NUMBERS: In Q4, HSBC reported:
- Operating expenses fell 2% year over year to $8.6 billion; and
- Revenue declined 11% YoY to $13 billion.
NOTEWORTHY: The bank plans to exit $1 billion of cost in 2024 through merger and acquisition decisions, Quinn said during the earnings call.
In November, Royal Bank of Canada announced its acquisition of HSBC Canada for $10 billion; the deal is expected to close April 1, according to HSBC’s website. Additionally, in January HSBC completed the sale of its retail banking business in France to Credit Commercial de France.
“We invest in simplification of the portfolio, closing down businesses organically, exiting costs organically,” Quinn said during the call. “We are also exiting costs through M&A.”
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