HSBC said yesterday it would cut 450 jobs from its equities trading and research business as part of its attempt to refocus its investment banking business.
Stuart Gulliver, co-head of HSBC's investment bank, said the move would cut numbers in the equities division from 1,450 to 1,000.
HSBC also gave a strong signal that bankers who survive the cull can look forward to healthy bonuses.
"We have no concerns that we will not be able to pay market-related compensation," Mr Gulliver said at a conference with investors.
HSBC suffered major defections from its investment banking arm in 2002 after it froze or dramatically reduced bonuses for equities traders and corporate financiers in response to the fact that business in these divisions had almost dried up.
Since then, HSBC has made it clear it wanted to rebuild investment banking so it could compete with bulge bracket banks such as Merrill Lynch and Goldman Sachs.
HSBC earlier this year poached John Studzinski, one of Morgan Stanley's brightest stars, to be in charge of investment banking along with Mr Gulliver.
Mr Studzinski said HSBC aimed to push its M&A business to within the top 10 in the world in the investment banking league tables. It is currently ranked 13th.
"If we can't in five years move into the top 10 we have to wonder what's been going wrong here," Mr Studzinksi said. "I don't think that ambition is totally off the wall."
The job cuts announced yesterday are being made as part of HSBC's plan to reorganise its global equities division to focus less on buying and selling shares for customers as commissions for those services shrink.
The bank will concentrate instead on trading stock using its own money, selling equity derivatives and borrowing and lending shares. The bank is merging its global equities business with its global markets division, which trades currencies and bonds.
Banks the world over have shed tens of thousands of jobs in the past three years to cope with a decline in business on the back of falling stock markets.Reuse content