HSBC set to axe 30,000 worldwide jobs despite £7bn profit

(AFP/Getty)

Banking giant HSBC today said it will cut up to 30,000 jobs over the next two years in a cull set to impact on more than 10% of its workforce.

The efficiency drive, which will save the bank up to £2.1 billion a year, is the latest within an industry battling to cope with reduced levels of activity.

HSBC's job losses include 5,000 posts already cut this year - 700 in the UK - but chief executive Stuart Gulliver said the cuts would go deeper.

He has not ruled out further redundancies in the UK, where the outcome of next month's independent report on reform of the sector is likely to be crucial in deciding where some of the jobs will go.

The Independent Committee on Banking has already indicated its preference for a ring fence around the UK banks' retail and investment banking operations, a move expected to push up costs in the UK.

Bank workers union Unite called for HSBC to clarify what impact the additional cuts announced today will have on UK staff. There are 1,290 branches in the UK and around 52,000 staff, out of a global workforce of 296,000.

With staff turnover of between 10% and 15% a year, HSBC hopes many of the global job losses will be achieved through normal staff attrition. The job cuts will be targeted at IT, back office, head office and support operations in a bid to reduce overheads.

HSBC said it expects to take on new staff in other areas of the business, particularly in the fast-growing areas of Asia and Latin America.

The jobs blow came as booming Asian business helped HSBC lift half-year profits by 3% to 11.5 billion US dollars (£7 billion). In the UK, profits rose 29% to £843 million but revenues fell slightly to £2.82 billion.

Lower bad debt charges helped the results, with the group taking no charge against its bonds from bailed out Ireland and Portugal or from Spain and Italy, which are tipped to be the next countries in the eurozone to hit trouble.

It did take a £65 million write-down on its marketable Greek debt, but this was small in relation to the total sovereign debt exposure to these countries of £5 billion.

HSBC's jobs cull follows the announcement of redundancies at rivals Credit Suisse and UBS in the past week as uncertainty over tougher regulation, the eurozone crisis and rising bad debts have hit confidence among the large banks.

As well as job cuts, HSBC said it will exit 20 countries where it currently operates.

Later this week, Barclays and Royal Bank of Scotland report figures and, like HSBC, both are expected to report tougher times for their investment bank divisions, raising fears over possible retrenchment. At the end of last year, Barclays cut back its investment banking staff as revenues slowed.

Shares in HSBC rose by 3% today as analysts said the half-year figures were ahead of hopes.

Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said: "HSBC has set the bar high for those that follow, beating market expectations and planning to streamline its business further."

PA