HSBC to cut back on jobs despite high profit reports

The HBSC building in Singapore.

Despite reporting a rise in its profits for the first half of 2011, HSBC announced on Monday that it will be pulling out its operations in countries where they continue to struggle.

In a statement released to the media, Europe’s largest bank said that a total of 30,000 jobs will be shed by the company as a result of the pull out. 5,000 jobs will be removed as it restructures its operations in Latin America, Great Britain, France, the Middle East, and United States. An additional 25,000 jobs will be cut by the bank between the remaining part of 2011 and 2013.

The reported employment cut down to be carried out by the HSBC will affect ten percent of the bank’s worldwide workforce.

Among the countries where HSBC will pull out its operations include the United States where they intend to sell 195 out of their 470 current branches to First Niagara Financial for a total of $1 billion in cash while 13 of their branches will be closed down. The bank also intends to sell its US Credit Card Portfolio. Capital One Financial Corp. and Wells Fargo are among the financial institutions that have submitted their bids to acquire the said portfolio, which has been estimated to be worth more than $30 billion in assets.

HSBC was the first of the major banks in Britain to released their financial report where they listed their pre-tax profits to be at $11.5 billion–a $400 million increase from their pre-tax profits of $11.1 billion the previous year. The announcement led to an increase in the bank’s share by 4.3 percent to close 620 pence at the London Stock Market, making them the second strongest performer on the blue-chip FTSE 100 Index.

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Posted by Amit Godhwani on Aug 1 2011. Filed under Business, Featured. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry