HSBC Holdings, Britain's largest bank by market value, will cut between 22,000 and 25,000 jobs around the world in an attempt to reduce costs and shift its center of gravity back toward fast-growing Asian economies.

The Malta Union of Bank Employees said that since return on equity at HSBC Malta has always been very good, it is unlikely that layoffs would be made.

But sources close to HSBC Malta told The Malta Independent that ”there was no regional or country specific split/breakdown in terms of impact”, effectively meaning that it was too early to comment on the situation.

Overall, HSBC International aims to cut costs by between €4 billion and €4.5 billion by the end of 2017 and reduce the number of full-time employees by up to 25,000, equivalent to around 10% of its global workforce. It is also not known how this would affect the local branch, however questions were sent to the bank.

 

Uncertainty is not healthy – MUBE

MUBE President William Portelli, speaking with this newsroom yesterday, said that he has not heard from HSBC Malta on this issue however said that "no news is good news, as long as there are no surprises forthcoming".

Mr Portelli did say however, that in the past the bank would call up and tell them not to worry about announcements if they didn't affect the local branch.

The agreement between HSBC Malta and the Union requires consultation before any layoffs occur, he said, adding that since the return on equity by the Maltese branch has always been very good it is unlikely that Malta would be affected by layoffs.

The uncertainty on the run-up to the announcement is unacceptable he said, adding that this is not healthy for employees. He stressed that the local workforce in the bank performs well. He stressed that the Union monitors the bank and it has constantly performed well.

“The Union understands the importance of productivity”, again reiterating that the Union is conscious as to why the Maltese branch must constantly perform and give added value.

The bank is currently in an industrial dispute with the Malta Union of Bank Employees, which a few weeks ago led to a strike.

Significant reshaping of portfolio – HSBC Holdings

HSBC International in a statement said it is "undertaking a significant reshaping of its business portfolio" and "redeploying resources to capture expected future growth opportunities."

A key tenet of the bank's strategy is to expand its presence in China and across the Asia-Pacific region. As well as having a sizeable presence across Asia now, HSBC has historic ties to the region. It was founded in Hong Kong in 1865 when the city was a British colony in order to finance growing trade between China and Europe.

"The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade," said Stuart Gulliver, HSBC's chief executive.

HSBC said it intends to sell its operations in Turkey and Brazil, which will see its workforce reduce by around another 25,000. Although planning to dispose of its operation in Brazil, HSBC said it plans to maintain a presence in that country to serve large corporate clients in their international dealings.

A large chunk of those lost jobs will be in Britain, the bank's headquarters, where up to 8,000 jobs could go. The bank hopes many of the job losses will come from attrition, by not filling posts that are vacated.

"We recognize that the world has changed and we need to change with it," said Gulliver.

The risks of Brexit

HSBC said a review on whether to move its headquarters out of London will be completed this year. The bank has already warned about the economic risks facing Britain if the country opts to leave the European Union in a referendum that the government has said will take place by the end of 2017. It's also complained about the cost of Britain's bank levy.

HSBC's plans to accelerate its investments in Asia will involve the expansion of the asset management and insurance businesses in a bid to earn more profits from the region's rapidly expanding class of newly wealthy.

In particular, the bank is planning to develop business in southern China's Pearl River Delta manufacturing heartland in southern Guangdong province, which is next door to Hong Kong and one of the wealthiest regions in the world's No. 2 economy. It's also planning a similar expansion in Southeast Asia, where booming economic growth in countries like Indonesia is swelling the ranks of the middle classes.

Gary Greenwood, analyst at Shore Capital in London, said the investor update filled in some details on previously announced initiatives.

"The only piece of material new information appears to be the announcement that the company aims to reduce its risk weighted asset base by one quarter or $290 billion," Greenwood said.

"We question whether management will be able to achieve this and deliver on its commitment to grow revenue," he added

Investors appeared fairly lukewarm to HSBC's strategic outlines, and the company's share price was down 0.3 percent at 618 pence in early trading in London.