• Thu
  • Apr 24, 2014
  • Updated: 1:29am

HSBC

The Hongkong and Shanghai Banking Corporation was founded in Hong Kong on March 3, 1865, and in Shanghai one month later. In 1980, HSBC acquired 51 per cent of Marine Midland Bank, buying the rest in 1987. HSBC Holdings was established in Britain in 1991 as the parent of The Hongkong and Shanghai Banking Corporation ahead of its purchase of the UK-based Midland Bank and the impending 1997 transfer of sovereignty of Hong Kong from Britain to China. 

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.

Share

More on this story

4

This article is now closed to comments

aplucky1
this is totally the technology dividend
enjoy it humans, it is not going to get better
captam
Yes, and technology that increasingly, doesn't work ! Witness, credit cards no longer functioning at overseas ATMs
We are still awaiting the "Great Worldwide Bank Heist" when computer hackers will, at the press of a key, wipe out all depositors' savings.
Coming to a bank near you soon!
impala
Fragile growth prospects, sure. Trying to 'revive profits,' no. That is probably wording straight out of a press release that is trying to dress this all up as 'necessary.'

Just a week ago, HSBC announced the profits for Q1 of 2013: 8.4bn USD (more than double the annual costs they are saving by firing 14,000 people). In fact, how did the bank fare during the past 5-6 years of economic crisis? (all in in USD, pre-tax profits as reported by HSBC itself)

2007: $24bn
2008: $9.3bn
2009: $7.1bn
2010: $19bn
2011: $22bn
2012: $20.6bn
(this last one would have been higher if they didn't have to pay the USD 4bn fine for help drug cartels and terrorist financing!)

So please HSBC, don't call this 'trying to revive profits,' call it what it is: a mass redundancy, destroying many people's livelihoods, in search for more, more, more profit and bonuses for those at the top.
daily
Gulliver is out for blood...........all this shedding costs means a lot of lost jobs and bigger bonuses for himself and the board.............These executives on know how to meet corporate targets and have no morals..........Shame on them.

Login

SCMP.com Account

or