HSBC plans to cut 14,000 employees
Baku, May 16 (AZERTAC). The bank expects to reduce the number of employees to as few as 240,000 over the next three years, Gulliver told reporters on a conference call today as he updated investors on his strategy for the London-based lender. HSBC had already announced plans to reduce headcount to about 254,000.
Gulliver, 54, is focusing on reducing costs, selling assets and expanding in faster-growing markets as he struggles to boost revenue that`s been crimped by the sovereign debt crisis in Europe. He`s already eliminated more than $4 billion of annual expenses, beating his initial target, and cut 46,000 jobs since he took over in 2011.
The shares rose 8 pence, or 1.1 percent, to 754.4 pence in London. HSBC (HSBA) has gained 17 percent this year.
While HSBC has met its original cost savings target, it hasn`t met its goal to reduce costs as a percentage of revenue because income hasn`t grown, Gulliver said today.
“After we set the target the euro-zone crisis started,” he said. The failure to meet the target “comes from the revenue side, rather than the cost side,” he added.
The bank will seek to reduce costs to about 55 percent of revenue in 2014-2016, HSBC said. That compares with a target of 48 percent to 52 percent for the previous three-year period. It plans to eliminate $2 billion to $3 billion of costs.
The additional job cuts will be global and not focused on any particular area of the business, Gulliver said today.
From next year HSBC, which had a common equity Tier 1 ratio of 10.1 percent in the first quarter, will seek to keep that gauge at more than 10 percent under new capital rules set by the Basel Committee on Banking Supervision. That compares with a target of 9.5 percent to 10.5 percent previously.
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