Fresh cost cuts at HSBC despite profits soaring

HSBC has vowed to keep a lid on costs. Picture: Getty
HSBC has vowed to keep a lid on costs. Picture: Getty
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HSBC has vowed to keep a lid on costs after first-quarter profits nearly doubled due to the bank’s three-year efficiency drive and a halving in bad debt charges.

News of the jump in profits, which helped power the FTSE 100 index to fresh highs, came just two weeks after the group announced it was shedding thousands of posts.

Chief executive Stuart Gulliver said yesterday that the industry was moving into “calmer waters” in the wake of the credit crunch and PPI mis-selling scandal, while charges for bad loans and compensation were easing.

But Gulliver, who was paid £7.4 million last year, said he could not give any assurances over potential future job losses.

Worldwide, the bank has lost 40,000 of its 300,000 employees as a result of restructuring and sell-offs since Gulliver took over at the start of 2011.

The cuts are 10,000 more than the number predicted at the time. Gulliver said HSBC was responding to “economic and regulatory” circumstances.

The bank, which is due to give a key strategy update next week, expects total staff numbers to fall eventually to 254,000.

A fortnight ago, HSBC announced a shake-up affecting more than 3,000 UK jobs, though about 2,000 further posts being created are expected to be mostly filled by displaced employees.

Yesterday’s Q1 figures showed that pre-tax profits had soared by 95 per cent to $8.4 billion (£5.4bn) – ahead of City hopes. Costs were down 10 per cent on a year earlier.