HONG KONG/LONDON (Reuters) – HSBC Holdings PLC (HSBA.L) on Tuesday unveiled plans to cut costs and simplify its structure to boost earnings, after its 2019 profit dropped 33% hit by one-time write-offs linked to its investment banking and commercial banking businesses in Europe.

The wider strategy overhaul comes amid slowing economic growth in HSBC’s major markets, an outbreak of a fast-spreading coronavirus, Britain’s protracted withdrawal from the European Union, and lower central bank interest rates.

While the London-headquartered bank has benefited from billions of dollars of investment in Asia over the last few years – mainly in China – sluggish performance in Europe and the United States has pulled down its returns.

Europe’s biggest bank by assets, which makes the bulk of its revenue in Asia, reported profit before tax of $13.35 billion for 2019 versus $19.89 billion a year earlier. That compared with the $20.03 billion average of brokerage estimates.

The profit drop was a result of $7.3 billion in write-offs linked to its global banking and markets and commercial banking business units in Europe, HSBC said in its earnings statement.

The bank said it planned to achieve a reduced adjusted cost base of $31 billion or below in 2022, underpinned by a new cost reduction plan of $4.5 billion, and return of tangible equity in the range of 10% to 12% in the same period.

HSBC is in over 50 countries across Europe, North America, the Middle East and Asia – with the latter accounting for roughly half of its revenue and 90% of profit.

The strategy update was presented by interim Chief Executive Noel Quinn. HSBC said the process for appointing a permanent CEO was ongoing and that it expected to make an appointment within the six to 12 months as earlier outlined.

Reporting by Sumeet Chatterjee in Hong Kong and Lawrence White in London; Editing by Christopher Cushing

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