HSBC
BusinessBanking & Finance
JOB LOSSES

HSBC to cut 14,000 staff worldwide in cost-cutting push

PUBLISHED : Wednesday, 15 May, 2013, 1:35pm
UPDATED : Thursday, 16 May, 2013, 5:48am

HSBC will slash 14,000 more jobs worldwide to save an extra US$2-to-US$3 billion in costs by 2016 as the bank strives to revive profits in the face of fragile growth prospects for the industry.

Chief executive Stuart Gulliver said the cuts, which would take staff numbers to between 240,000 and 250,000 by the end of 2016 from around 254,000 at the end of the first quarter of 2013, were needed to keep the ratio of costs-to-revenue near 55 per cent.

The target is above a previous goal of 48 to 52 per cent, despite US$4 billion of annualised cost savings already made.

Gulliver, who unveiled the plan at a presentation at the bank's London headquarters, has been streamlining HSBC since he was promoted to chief executive in 2011.

A total of 49,000 to 59,000 jobs will have gone between the first quarter of 2011 and the end of 2016.

A spokesman for the bank's Hong Kong operation said there was no bank-wide programme of job cuts planned in the city.

The group's Asia-Pacific chief executive Peter Wong Tung-shun said the profitability of Hong Kong business was helped by increased activity among clients using China's yuan currency to settle trade. HSBC is a major player in the fledgling market for the international use of the yuan.

HSBC has said it will dispose of non-core investments to help cut costs and reiterated its position on China holdings.

"We have often said Bank of Communications is our strategic key holding in China and obviously Bank of Shanghai is not," he replied when asked if HSBC would sell Bank of Shanghai, "but it is only about US$500-600 million and that is immaterial to the group". HSBC holds an 8 per cent stake in the Shanghai bank.

Gulliver said the bank will reinvest for organic growth and has no big acquisitions planned.

HSBC committed to grow both the business and dividends.

The bank reaffirmed its target of return on equity at 12-15 per cent and it maintained a target of progressive dividends at a payout ratio of 40-60 per cent.

Gulliver said it might start share buy-backs as soon as next year, after seeking approval from regulators in Britain and shareholders.

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