This article is from the source 'independent' and was first published or seen
on .
It last changed over 40 days ago and won't be checked again for changes.
HSBC to cut tens of thousands of jobs worldwide as bank looks at moving headquarters from London to Asia
HSBC to cut up to 25,000 jobs worldwide, including 8,000 in the UK
(35 minutes later)
HSBC will cut almost 50,000 jobs from its payroll, take an axe to its investment bank and shrink its risk weighted assets by $290 billion in an effort to improve its sluggish performance, Europe's biggest bank said on Tuesday.
Banking giant HSBC is to cut between 22,000 and 25,000 jobs globally including a reported 8,000 in the UK as part of an overhaul to slash costs and reshape the business.
The announcement to the Hong Kong stock exchange came ahead of a presentation to investors and analysts when Chief Executive Stuart Gulliver will give more detail on his second major strategic plan since he took the helm at the start of 2011.
The bank said it was planning a reduction of around 10% of its full-time workforce.
The job cuts, which will affect almost a fifth of the bank's workforce, involve 25,000 staff from the expected sales of the lender's Brazil and Turkey units and 22,000-25,000 from the consolidation of IT and back office operations and branch closures.
It is thought 8,000 jobs could be impacted in the UK, where HSBC has around 48,000 employees.
The cuts are the latest in a series of heavy staff reductions and will leave the bank with around 208,000 full-time equivalent staff, down from 295,000 at the end of 2010 and 258,000 at the end of 2014.
The group also announced aims to sell its businesses in Turkey and Brazil, which will see its workforce reduce by around another 25,000.
However the cuts, to be completed by 2017, will be followed by some hiring in growth businesses and the bank's compliance division, HSBC said without providing details on how many people will be recruited.
It comes as the bank seeks to deliver annual cost savings of around 4.5 billion US dollars (£2.9 billion) to 5 billion US dollars (£3.3 billion) by the end of 2017.
“Slaughtering the staff is not necessarily the solution unless management makes the bank considerably less complex,” said James Antos, analyst at Mizuho Securities Asia.
HSBC also confirmed it would finish its review of where to base its headquarters by the end of the year, after announcing recently that it was considering a move away from the UK due to regulatory and structural reforms.
HSBC also said it will shrink the global banking and markets division to less than one third of HSBC's $2.6 trillion balance sheet from its current level of around 40 percent, a significant but expected shift for the lender.
PA
Investors had been calling for more radical cuts at the global banking and markets division, that Gulliver previously ran for five years, whose returns have suffered in tough market conditions.
The bank set its new target for return on equity at greater than 10 percent by 2017, down from its previous target of 12-15 percent by 2016.
It confirmed the planned sale of its units in Turkey and Brazil, adding it would keep a presence in the latter to serve corporate clients.
Despite the changes not going as far as some analysts hoped, HSBC shares rose 1.5 percent in Hong Kong following the announcement, outperforming the Hang Seng Index which fell 1 percent on Tuesday morning.
“The market is likely to respond positively on the move with investors having a much clearer idea of HSBC's direction going forward,” said Steven Leung, a sales director at UOB Kay Hian in Hong Kong.
The new strategy is not solely about cuts though, with the lender saying it will target growth in Asia by expanding its insurance business and its presence in China's Pearl River Delta region.
The bank also set out the eleven criteria it will use to evaluate whether to move its headquarters from London to Asia, likely Hong Kong. They include factors such as economic growth, tax, and government support for the growth of the banking system.
It will complete the review of the possible move by the end of the year, HSBC said. (Reporting By Lawrence White, additional reporting by Donny Kwok; Editing by Rachel Armstrong)
