HSBC boss Stuart Gulliver warns 14,000 more jobs to be cut


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The Independent Online

HSBC today warned that it could cut up to another 14,000 jobs worldwide as chief executive Stuart Gulliver continues to take the axe to the cost base of Europe’s biggest bank.

The latest round of job cuts will run through until 2016, and comes on top of the almost 40,000 posts that have gone since Gulliver took the helm at the start of 2011.

He said he expected the workforce to come down to between 240,000 and 250,000 over the next three years.

As with previous cuts, the bank said the next ones would include both  the sale and closure of non-core businesses and redundancies. It did not specify where the cuts are likely to  fall geographically.

Gulliver also signalled that HSBC could become the first bank in Europe to restart buying back its own shares since the financial crisis began in 2008. He said: “We are generating surplus capital every quarter. We can use that to grow the business, to increase the dividend and to tackle the dilutive effects of investors who choose to take a  scrip dividend.”

A scrip dividend is one where backers take new shares instead of cash, and is particularly popular among the bank’s Far Eastern investors. Each time such new shares are issued, it effectively pushes down earnings per share slightly. Having a share buyback would counter that effect.

Gulliver said such a move would need shareholder approval, so could probably not start until after the annual meeting in 2014. Two years into his first three-year plan, he today lifted the amount of annual cost savings he wants to see by 2016 by $2 billion (£654 million) to $3 billion. He has already cut costs by $4 billion, which was ahead of his original $3.5 billion target, and is now going for twice that figure.

He said he wants the bank to focus its growth on commercial banking in the Far East and Latin America and within retail banking on wealth management in the UK and Far East.

Gulliver did not set a new target for how many more businesses could be closed or sold, having already got rid of 52 non-core or underperforming ones. He added: “HSBC is now simpler, easier to manage and ready to  take advantage of growth opportunities. We will continue to exert tight cost discipline while streamlining processes and procedures.”

HSBC last week reported 2012 pre-tax profits of $8.4 billion, almost double what it made in the previous year. The shares today rose 5p to 751.4p.