hsbc plans to cut an additional 30000 jobs
Last Updated : GMT 16:22:18
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HSBC plans to cut an additional 30,000 jobs

Arab Today, arab today

Arab Today, arab today HSBC plans to cut an additional 30,000 jobs

London - Arabstoday

HSBC Holdings Plc, Europe’s largest bank, said Monday it plans to cut 30,000 jobs by the end of 2013, about 10 percent of the total, to stem rising costs.The bank’s costs in relation to revenue rose to 57.5 percent in the first half, from 50.9 percent a year earlier, because of higher staff numbers, wage inflation and other costs, London-based HSBC said today in a statement. That’s above its target of 48 percent to 52 percent, it said.“The market is likely to interpret the job cuts in a positive way,” said Neil Smith, a banking analyst at WestLB AG in London. “HSBC need to keep their costs under control.”HSBC is cutting jobs and closing offices to reduce costs by as much as $3.5bn over the next two years as it tackles wage inflation in faster-growing economies and prepares for stricter capital rules. The bank follows Credit Suisse Group AG, UBS AG, Bank of America Corp and Goldman Sachs Group Inc. in eliminating roles as investment banking revenue declines. European banks have cut 230,000 jobs since the start of the financial crisis in 2007.“What we’re talking about is removing a lot of back, functional head office support staff where we believe we have created an unnecessary bureaucracy in this firm over a number of years,” said Stuart Gulliver, chief executive officer.HSBC has already cut 5,000 of the jobs, Gulliver told journalists today.Unite, a British trade union representing some HSBC staff, described the restructuring as “brutal” and said it was unfair that employees were paying for a banking crisis for which they were “in no way responsible.”HSBC, the first British bank to report earnings for the first half, said net income rose to $9.22bn from $6.76bn a year earlier.Bad loan provisions in the North American business fell to $3bn, from $4.55bn. Pretax profit at its investment banking unit fell to $4.81bn, from $5.45bn.HSBC today agreed to sell its upstate New York branch network to First Niagara Financial Group Inc. for about $1bnas it pares US operations. The bank is also seeking a buyer for its US credit-card business. The bank sold part of its Russian consumer banking unit last month and on July 28 said it will close its 10 retail branches in Poland, where it employs 263 people.The bank acquired US subprime mortgage lender Household International, now known as HSBC Finance, for $15.5bn in 2003. HSBC has since halted consumer-finance lending at the unit and recorded more than $63bn of provisions in North America, according to data compiled by Bloomberg based on company filings.The proportion of profit HSBC gets from its Asian, Latin American and Middle Eastern businesses rose to 76 percent in the first half, from 64 percent in the same period last year, the bank said today.“We remain positive on the outlook for emerging markets,” the company said. “We expect a soft landing in China and we believe Hong Kong is well-equipped to mitigate overheating pressures.”Profit before tax at HSBC’s European unit tumbled 39 percent to $2.15bn in the first six months of the year. The region accounted for 19 percent of HSBC’s pretax profit in the first half, from 32 percent a year ago.In its consumer banking division, HSBC will focus on the U.K., Hong Kong, high-growth markets such as Mexico, Singapore, Turkey and Brazil, and smaller countries where it has a leading market share, Gulliver told shareholders in May. It plans to boost revenue at the unit by $4bn in the near-to-medium term, the bank said at the time. From / Arabian Business

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