HSBC will shed almost 50,000 jobs and take an axe to its investment bank, cutting the assets of Europe’s biggest lender by a quarter in a bid to simplify and improve its sluggish performance.
The bank said on Tuesday about half the staff cuts will come from the sale of businesses in Brazil and Turkey. The other half will come from cutting about 10 percent of the remaining 233,000 staff by consolidating IT and back office operations and closing branches. About 7,000-8,000 cuts are expected to be in Britain, or one in six UK staff.
The cuts will leave HSBC with about 208,000 full-time equivalent staff by 2017, down from 295,000 at the end of 2010 and 258,000 at the end of 2014, although the bank said it will be hiring in growth businesses and its compliance division.
The cuts are part of a second attempt by Chief Executive Stuart Gulliver to boost profits since he took the helm at the start of 2011. The previous effort was foiled by high compliance costs, fines, low interest rates and sluggish growth.
“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 shares in London opened 0.9 percent higher at 625 pence before slipping back to underperform both the FTSE 100 index .FTSE and European banking stocks .SX7P slightly.
HSBC said it will cut its assets on a risk adjusted basis (RWA) by $290 billion by 2017. That will include a reduction of a third, or $140 billion, in global banking and markets (GBM), its investment bank. That means GBM will account for less than a third of HSBC’s balance sheet, down from 40 percent now.
Read more at Reuters
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