HSBC has abandoned one of its key performance targets amid a renewed cost-cutting drive that could see it shed as many as 14,000 additional jobs around the world.
Faced with the challenge of boosting its revenues in a low-growth environment, Europe’s largest bank is seeking up to $3 billion (£1.96bn) in additional savings by 2016. Between 4,000 and 14,000 additional jobs will be lost as a result.
It was unclear yesterday what types of jobs would be lost in which counties, though chief executive Stuart Gulliver said the cuts would be “thinly spread”. Though HSBC has a limited retail presence in Scotland, the group employs about 3,000 people north of the Border, most in call centres in Edinburgh and Hamilton.
Gulliver told investors that a key target to get costs below 52 per cent of revenue would be dropped. The new goal is to keep the ratio near 55 per cent.
“We’re clearly hitting on the costs, but we’re missing on the cost efficiency ratio because of revenue, which is hard for us to control,” Gulliver said.
HSBC has cut 34,000 full-time jobs since 2010, the year before Gulliver took over and launched a radical overhaul of the bank. Last year it employed 261,000 staff around the world, a figure that is expected to fall to 254,000 once previously-announced cuts and divestments are completed. The fresh cuts will take the global headcount to between 240,000 and 250,000 by 2016.
Much of the savings so far have been achieved through disposals as the group whittles down the number of countries in which it operates to a core of 22.
Amid weak growth in Europe, HSBC aims to concentrate on high-return markets in Asia, where it generated about two-thirds of its profits in the first quarter of this year.
The London-headquartered group made a pre-tax profit of $8.4bn in the first three months of this year, nearly doubling profits for the same period a year earlier.