HSBC will shed 30,000 jobs as it retreats from countries where it is struggling to compete, Europe's biggest bank said today after it reported a surprise rise in first-half profit.
Shares in HSBC rose over 4% after it unveiled first-half pretax profits of $11.5 billion, up from $11.1 billion a year ago and better than expectations of $10.8 billion.
The bank also said it had cut 5,000 jobs following restructuring of operations in Latin America, the US, Britain, France and the Middle East and that it would cut another 25,000 between now and 2013.
'There will be further job cuts,' chief executive Stuart Gulliver said. 'There will be something like 25,000 roles eliminated between now and the end of 2013,' he added.
HSBC Ireland employs over 700 people in a range of financial activities including corporate banking, fund administration and insurance services. It is not yet known if any of the immediate job buts will apply to the bank's operation in Ireland.
The cuts equate to roughly 10% of HSBC's total workforce. They come on top of planned reductions in overall headcount in a programme of disposals that also forms part of a plan to focus on HSBC's Asian operations.
The bank is reversing a strategy that had been criticised for 'planting flags' around the world. Gulliver's far-reaching plan unveiled three months ago aims to slash costs and he intends to sell, shut or slim down retail banking in 39 countries.
HSBC said yesterday it would sell 195 US branches to First Niagara Financial for about $1 billion in cash, and close another 13 of the 470 sites it had. The bank also intends to sell HSBC's US credit card portfolio, which has more than $30 billion in assets, a move which would free up capital.
Capital One Financial Corp and Wells Fargo are among the bidders, sources have said. Another suitor could be Barclays.
HSBC is the first of Britain's big banks to report for the quarter. Rivals are also cutting jobs and shaking up their business model as the euro zone debt crisis has hit fixed income trading revenues hard and tougher regulations are hurting returns for investors.
The bank today highlighted risks to global economic recovery from increased regulation, particularly as governments grapple with sovereign debt crises and try to plug holes in their budgets.
'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,' HSBC said.