LONDON — HSBC, Europe’s biggest bank, plans to announce thousands of job cuts on Monday as part of a wide-ranging cost-reduction program that started in May, a person with direct knowledge of the decision said Sunday.
HSBC plans to cut about 10,000 jobs, or 3 percent of its global work force, said the person, who declined to be identified before the figures are made public. The bank, which employed 307,000 people at the end of last year, is expected to announce the job cuts when it reports earnings for the first half of this year on Monday. HSBC declined to comment on the job cuts, which were first reported by Sky News.
Meanwhile, on Sunday, the bank announced that it would sell 195 of its branches in upstate New York to the First Niagara Financial Group for about $1 billion. The branches being sold hold about $15 billion in deposits.
Stuart T. Gulliver, who took over as HSBC’s chief executive in January, said in May that he was seeking to lower costs by at least $2.5 billion in the next two to three years mainly by scaling back the bank’s retail operations outside Britain. HSBC said in May that it might also sell its bank card business in the United States. It has already withdrawn from the Russian retail banking market.
Mr. Gulliver has said that he plans to radically change HSBC’s business in the United States, which has been a drag on group earnings mainly because of the bank’s ill-advised acquisition of the subprime lender Household International in 2003. Mr. Gulliver has indicated that he hopes to strengthen the business by winning market share with its commercial banking unit.
To compensate for sluggish growth in Europe and its British home market, Mr. Gulliver also plans to win market share in faster-growing economies like those in Latin America and Asia, where HSBC has a historically strong presence. HSBC was helped through the subprime mortgage crisis by its growing business in Asia, where it continues to generate more than half its annual pretax profit.
HSBC would be the latest bank to announce job cuts. Credit Suisse said last week that it planned to eliminate 2,000 positions, or 4 percent of its global jobs. Goldman Sachs and Morgan Stanley are also reducing their head counts. The cuts are expected to help the banks improve returns despite slower economic growth and a stricter regulatory environment.
First Niagara’s deal to purchase the HSBC branches in upstate New York would more than double its branch network in the region. As of the end of June, the firm, based in Buffalo, had 117 branches in upstate New York and 346 total.
First Niagara reportedly beat out several bigger competitors for the HSBC branches, including MT Bank, whose market value is more than three times larger.
HSBC also plans to consolidate 13 of its branches in Connecticut and New Jersey into nearby existing locations.
HSBC’s pretax profit for the six months to the end of June is expected to fall to $10.9 billion from $11.1 billion a year earlier, according to the average of analyst forecasts polled by Reuters.
HSBC’s shares fell 8.7 percent this year, less than its British rival Barclays, which is set to report earnings on Tuesday.
Julia Werdigier reported from London and Michael J. de la Merced from New York.
Article source: http://feeds.nytimes.com/click.phdo?i=7a812d67bd7125e14d532b79c31404e6
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