HSBC confirms 30,000 jobs will go

• Worldwide workforce to be cut • New chief seeks $3.5bn in savings • First-half pre-tax profit up 3% to $11.5bn The jobs axe is to cut deeply through HSBC, which confirmed on Monday that 30,000 roles are to be lost across its global banking group over the next three years. The new chief executive Stuart Gulliver, who took the helm in January after 32 years at the bank, revealed that 5,000 roles had already gone so far this year and that another 25,000 would need to be removed from the 296,000 global workforce. Revealing the extent of the job cuts for the first time, Gulliver had signalled in May that roles would be shed as he set about achieving $3.5bn (£2.14bn) of savings within three years as he aims to bolster the bank’s return on equity to 12-15% from 9.5% in 2010. He stressed that some of the reductions would come through natural staff turnover and that the bank would continue to hire in some of its faster growing markets. Gulliver was speaking as the bank reported better than expected first-half pre-tax profits of $11.5bn, up 3%, with the fastest growth coming from Asia and Latin America. Shares in HSBC rose nearly 3% to 611.9p in the minutes after the figures were published at 9.15am . Some $2.1bn of profits were made in Europe but the majority is now generated in Hong Kong – some $3bn – and the rest of Asia Pacific – $3.7bn – where profits are up 32%. The troubled North American business managed a 5% increase in profits to $606m, the smallest generator of profit, with the Middle East bring in $747m and Latin America $1.1bn. Gulliver, who had announced in May after a day-long investor meeting that he had concluded that retail business in 39 out of 61 countries was “subscale”, said: “I am pleased with these results, which mark a first step in the right direction on what will be a long journey.” In total the bank has operations in 87 countries and Gulliver wants to strip out layers of management built up under previous regimes and focus on commercial and investment banking rather than retail operations in some countries. The bank is concerned about the impact of potential regulatory changes in the UK that could be made through the independent banking commission, chaired by Sir John Vickers, as well as global changes proposed by international banking regulators in Basel. Douglas Flint, chairman, said: “The pace and quantum of regulatory reform continues to increase at the same time as the global economy appears to be losing momentum in its recovery. We are concerned about the possible pro-cyclical impacts of further deleveraging of the global economy arising from the regulatory reform agenda, at the same time as sovereign credit concerns and fiscal consolidation challenges become more critical.” The loan impairment and other credit risk provisions were down 30% on the same period last year, reaching $5.3bn. A provision of $65m was made against HSBC’s holdings of Greek bonds but it has taken no fresh hits against its Irish or Portuguese debt. Gulliver said he felt confident the eurozone would hold together and hoped that the current US debt package would be approved by US politicians to “restore some confidence” in the markets. The second interim dividend for 2011 is US$0.09 per ordinary share – the equivalent of $1.6bn. HSBC Banking Job losses Jill Treanor guardian.co.uk

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