Belfast Telegraph

HSBC will cut 30,000 jobs as it fights costs

By Philip Whiterow

Banking giant HSBC has warned it will cut up to 30,000 posts by 2013 as the jobs cull among the world's big banks gathers pace.

HSBC is currently in the process of reducing its headcount by 5,000, but chief executive Stuart Gulliver warned the cuts were set to go deeper, although he stressed the figure of 30,000 excludes HSBC's future expansion plans.

The updated restructuring plan comes despite better-than-expected results for the six months to June after profits improved 3% to £7bn, with the company's Asian business again the driving force.

In the UK, where the company has 1,290 branches and around 52,000 staff, profits rose 29% to £843m.

The move by HSBC reflects tougher times for the investment banking arms of the big banks which has seen widespread redundancies announced at rivals Credit Suisse and UBS in the past week.

Uncertainty over tougher regulation, the eurozone crisis, rising bad debts and, in the UK, the possible impact of the Independent Commission on Banking report have all affected the mood among banking firms.

HSBC employs around 335,000 people worldwide. Mr Gulliver said the job cuts would be targeted at back office, head office and support operations in a bid to reduce overheads.

The 30,000 reduction is a gross figure and there will be additions in regions such as Asia and Latin America, where HSBC saw the strongest revenue growth in the first half.

HSBC has a staff turnover of between 10% and 15% and Mr Gulliver said the cuts would reflect this rate of attrition.

Weak revenue growth in Western Europe and the UK reflected the tough economic situation in the region, a HSBC statement added. UK revenue fell slightly to £2.82bn from £2.84bn.

HSBC said 5,000 of the planned job cuts had already taken place.

This included 700 in the UK that were announced in June as a result of regulatory changes to the way financial advice is allowed to be given. HSBC added it is on course to meet its targets for business lending agreed with the government under Project Merlin, having lent £22.7bn, but the group was behind on small firm lending with £5.6bn advanced in the first six months against a full-year goal of £11.7bn.

Mortgage lending rose by 35% to £6.7bn with HSBC's share of the UK mortgage market at a record of nearly 11%.