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There will be some cuts to Canadian staff, but the bank was unable to say if they would result in net losses. “Canada is one of the countries that has been identified as performing well,” said Sharon Wilks, HSBC Canada head of media relations. “There will be cuts in some areas even as we will be hiring in areas that represent growth opportunities.” The bank is cutting US$100 billion in assets over the next three years as it reduces its U.S. and European footprint and focuses on Asia and the Middle East. (The Logic)

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Talking point: While the bank as a whole is struggling, HSBC’s Canadian operations are doing well. In 2018, HSBC Canada announced it was opening more branches, and HSBC highlighted Canada as a “strong performing franchise” in its 2019 annual financial results, emphasizing that its return on tangible equity in the country hit 12 per cent. By comparison, HSBC’s global net profit dropped 53 per cent in 2019. HSBC plans to combine its private-banking unit with retail and wealth management globally, but only the latter division operates in Canada. The bank has increasingly challenged the Big Six for market share. Last week, The Logic reported HSBC wants the federal government to require banks to share information with fintechs, even as other large banks urged caution. RBC, BMO and CIBC have all reported cuts in recent months.

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The cuts come on top of a 4,700-person reduction announced in August. The bank’s current headcount is about 238,000.(Financial Times)

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Talking point: Global banks are shedding staff rapidly this year. In August, Deutsche Bank said it would eliminate 18,000 people. In September, Commerzbank announced plans to cut 4,300. All told, cuts announced by banks around the world prior to the HSBC news were around 60,000 in the first nine months of 2019. Many of the cuts are in Europe, where banks are up against a slowing economy and negative interest rates. HSBC’s European division, for example, lost £520 million in the first half of 2019, the only region to record a loss. Economic conditions are only part of the story. Automation will allow U.S. banks to cut 200,000 jobs in the next decade, according to a report from Wells Fargo. Canadian banks aren’t seeing the deep cuts of their European counterparts, but it’s unclear whether they’re as poised to benefit from technology as U.S. firms, either. American banks are spending US$150 billion annually on technology. RBC, Canada’s biggest bank, announced a plan to spend $3.2 billion last year.

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The tool, which was originally designed to flag suspicious activity, combines clients’ banking history with publicly available data on company ownership and directorship to identify attractive potential clients. (Reuters)

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Talking point: Noel Quinn, HSBC’s interim CEO, has made data analytics a major priority. Like many global banks, HSBC is struggling with trade tensions—a particular concern for a firm that makes much of its money facilitating commerce between the East and the West. In August, the bank announced it would cut 4,700 jobs and oust then-CEO John Flint after just 18 months in the position, citing board concerns about a challenging global environment and a need for strategic redirection. The data-focused Quinn stepped in shortly after. This algorithm was originally developed in 2012 as part of a US$1.9-billion settlement with U.S. authorities after a high-profile scandal that saw HSBC was convicted of failing to stop money laundering by drug cartels in its Mexico division.

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The bank’s internal investigation between 2016 and 2017 found that Huawei Technologies maintained close financial ties to a suspected front company in Iran called Skycom, years after it had purportedly sold the unit. At the time, the bank was trying to get the U.S. Department of Justice to drop charges against it for allegedly violating U.S. sanctions on Iran. The findings of the probe inform the current criminal case against Huawei CFO Meng Wanzhou. HSBC is not under investigation in the case.(Reuters)

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Talking point: HSBC is one of the victims in the U.S. case against Meng, who is accused of conspiring to defraud it and other banks that cleared more than US$100 million of transactions involving Skycom. Meng remains under house arrest in Vancouver, awaiting extradition to the U.S.

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The Huawei CFO’s legal team is asking for less redacted copies of communications between the FBI and CSIS related to her December 2018 Vancouver arrest, and details of any coordination between the agencies. (Bloomberg)

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Talking point: Monday’s hearing on the disclosures was in federal court; last week in the B.C. Supreme Court, which is considering her extradition to the U.S., Meng’s lawyers alleged the Trump administration was using the process as a “bargaining chip” in trade negotiations with China. Meanwhile, HSBC rejected a Chinese media report that claimed it prompted the investigation of Huawei and the alleged violations of U.S. sanctions on Iran, of which Meng is accused.