HSBC will shed almost 50,000 jobs and take an axe to its investment bank, cutting the assets of Europe's biggest lender by a quarter in a bid to simplify and improve its sluggish performance. Hayley Platt reports.
Cuts at Europe's biggest bank were widely expected but the scale of them is huge. HSCB will axe almost 50,000 jobs - that's almost a fifth of its workforce. Half the job cuts will come by selling off businesses in Brazil and Turkey Another 7 - 8,000 will be from the UK where one in six staff will go. The investment business will be slashed and assets will be cut by a quarter. It's the second major strategic overhaul since Stuart Gulliver took the helm in 2011. Steve Slater is Reuters banking correspondent. SOUNDBITE: Steve Slater, Reuters banking correspondent, saying (English): "Business is still running at too high a cost and its returns are below where he has promised they should be so it has raised some questions that maybe the bank is simply too big to manage and is too complex to deliver the returns that small and nimble banks can achieve." It's been a difficult year for the bank which does most of its business in Asia. There have been allegations of tax evasion at its Swiss private bank. And multi-billion dollar fines for foreign exchange market manipulation. It managed a 4 percent rise in first-quarter pretax profit but investors weren't satisfied. Francis Lun is CEO of GEO Securities in Hong Kong (SOUNDBITE) (English) CEO OF GEO SECURITIES LIMITED, FRANCIS LUN, SAYING: "The problem with HSBC is not that their operations are not sound. It's just that they face a hostile regulatory environment. The authorities in the US and the UK just want their pound of flesh, they want revenge, and for crimes that actually HSBC really did not contribute that much." HSBC will push through annual savings of up to $5 billion by 2017. But the cuts will cost around $4.5 billion to implement over the next three years. The bank says it will refocus its efforts in Asia. But it's not yet decided whether to move its headquarters back there from London. It would avoid costly UK bank levies and curbs on bonus payments if it did. But long-term stability and economic growth are other factors, as is Britain's current debate over its membership of the European Union.