Worst is 'almost over for HSBC in HK'

PUBLISHED : Tuesday, 28 February, 2012, 12:00am
UPDATED : Tuesday, 28 February, 2012, 12:00am


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HSBC says the worst is nearly over for the bank's operations in Hong Kong, as its restructuring plans in the city are to be wrapped up by the end of the second quarter.

But the bank would not say how many Hong Kong employees it had laid off or how many it planned to let go as it concluded its cutbacks. Last week it said there would be fewer job cuts in the city than the 3,000 originally estimated.

At the same time, the banking group said chief executive officer Stuart Gulliver received GBP6.6 million (HK$81 million) in actual pay, bonuses and awards for last year at a time when the British government is calling for banks to rein in excessive executive pay as unemployment reaches a more-than-a-decade high.

'A number of reductions will take place this year,' said Gulliver. He added the bank would continue to hire more people for front-office functions, involving direct interaction with customers.

Last year, while HSBC was cutting staff in Hong Kong, it was also hiring here. The net effect was that the head count in the city dropped by around 180.

HSBC is one of the city's largest employers, with 28,984 employed here at the end of last year.

Globally, the bank has fired about 11,000 people since the first quarter of last year. Gulliver said about 19,000 more jobs were expected to go globally. But he refused to say how many jobs would be lost in Hong Kong when asked to specify.

The bank's net profit for last year jumped nearly 28 per cent to US$16.8 billion year on year, beating analysts' estimates.

The London-headquartered bank's profits were boosted by a US$3.9 billion accounting gain on the value of its debt. Analysts said stripping out this windfall, the underlying pretax profit would have dropped 6 per cent to US$17.7 billion as a result of rising wages in emerging markets, restructuring costs and a levy on British-based banks that came into effect last year.

Gulliver's bonus is likely to cause controversy. Royal Bank of Scotland CEO Stephen Hester recently waived his bonus after a public outcry.

'In the case of HSBC, since the bank has never taken a penny of the UK government bailout money and since the UK government does not own the bank, it would be improper for Parliament to put pressure on HSBC or Mr Gulliver on this point,' said James Antos, a senior analyst at Mizuho Securities.

Headhunters said the bank slashed bonuses by an average of 25 per cent.

The Hong Kong and Kowloon Trades Union Council, which had originally planned a protest in front of the HSBC building yesterday, called it off at the last minute, saying it had received 'positive feedback' from the bank over the weekend.

Lee Kwok-keung, the Hong Kong and Kowloon Trades Union Council chairman, said some HSBC staff were expected to get a pay rise in April.


The amount in Hong Kong dollars Gulliver got in pay, bonuses and awards last year, when HSBC axed 11,000 workers