Global bank HSBC Holdings is cutting 1,100 jobs in its investment banking operation, or 4% of the unit’s total, as it weathers the global financial crisis.
“We’re doing it because of market conditions and the economic environment, and our cautious outlook for 2009,” Hong Kong-based spokesman Gareth Hewett told Reuters on Friday. HSBC’s Hong Kong-listed shares rose 0.7% on Friday, outperforming a weaker broader market .HSI, while its London-listed shares were down 0.6% by 0840 GMT against a 1.6% fall in the sector. “Markets continue to be challenging and difficult but our strategy leaves us well positioned for the next wave of global growth, when it comes,” Hewett said.
The cuts add to more than 80,000 job losses across the banking landscape in the past 18 months as the worst financial crisis since the Great Depression deepens. It has caused unprecedented change on Wall Street and the demise of venerable firms such as Bear Stearns and Lehman Brothers.
The HSBC jobs are in front- and back-office operations. About 500 of the cuts will be in Britain and about 300 more will be elsewhere in Europe and the United States. About 100 are in Hong Kong, where the bank’s large Asian operations are based. HSBC will be left with about 26,000 staff in its global banking and markets (GBM) division. It employs about 335,000 people across the bank.
HSBC was one of the first banks to feel the sting of the subprime mortgage crisis in the United States and has booked writedowns or losses of $18.7 billion since the start of the global credit crunch last year. In August, the bank posted a 28% fall in first-half pretax profit to $10.2 billion as it took a $14 billion hit from bad debts on US home loans and asset writedowns. In its global banking and markets business, pretax profit fell 35% in the first half to $2.1 billion, although that was a 37% increase from the H2 of 2007. “There is no change in strategy at Global Banking and Markets, which is to be a leading emerging markets-led and financing-focused wholesale bank,” Hewett said. (Reuters)