Reports yesterday revealed British banking group HSBC announced that it will have cut 30,000 jobs worldwide by 2013; however questions sent to HSBC Malta on the local impact remained unanswered at the time of going to print.
According to AP reports the bank which currently employs near to 300,000 people worldwide, will cut some 30,000 jobs worldwide by 2013, and sell almost half its retail bank branches in the U.S. as part of a new strategy to focus on fast-growing emerging markets.
HSBC Call Centre employees have expressed fear for the security of their jobs, however a vacancy is currently being advertised on their website and there was a recruitment drive during the Farsons Beerfest last week.
The bank, which reported a better-than-expected 3% increase in pretax profits to €8 billion in the six months to June, has already cut 5,000 jobs this year.
AP reported spokesman Patrick Humphris saying that another 25,000 will be slashed by 2013; however he did not go into details as to where the job cuts would be. He said that the group is still hiring in emerging economies such as Brazil and Mexico.
The restructuring will also involve the sale of 195 retail banking branches in the US to First Niagara Bank for around $1 billion, AP reported. Most of the branches to be sold are in upstate New York, while six are in Connecticut. Four more are in northern Westchester County, and two in Putnam County.
The bank is still dealing with the legacy of bad loans in the US from the 2003 acquisition of consumer lender Household International Inc. The acquisition made HSBC the biggest sub-prime lender in the US at the time, which resulted in billions of losses to HSBC, leading up to the financial crisis of 2008.
AP quoted new chief executive Stuart Gulliver, who said in a statement, “I am pleased with the results, which mark a first step in the right direction on what will be a long journey.”
He also said that he expects financial markets worldwide to remain volatile this year and in 2012. He predicted growth in the U.S. and Europe would remain sluggish, weighed down by high debt levels and government budget cuts, but that Asia-Pacific and Latin American would continue to grow.
News of the bank’s overhaul and its profit — earnings per share rose to 51 cents in the first half from 38 cents a year earlier, allowing for a 12.5% dividend increase to 18 cents — boosted the company’s share price.
In London shares in HSBC Holdings PLC were up 4.4 % at 619.40 pence (10.17), by midday yesterday. Seymour Pierce analyst Bruce Packard said the pretax profit figures were about 6% higher than forecast.
“These results look better than expected, underlining the attractions of HSBC’s conservative balance sheet and developing markets business,” he said.
This move followed similar announcements by other global banks, such as Credit Suisse, UBS and Goldman Sachs, which also announced in recent weeks that they needed to trim payrolls to adjust to tougher market conditions.