HSBC aims global focus on emerging markets
HSBC has announced that it will cut 25,000 jobs globally by 2013 as it looks to cut costs and exit banking operations in 25 countries whilst strengthening its presence in emerging markets.
HSBC has not announced any more job cuts for the UK. It is expected that most of the additional job cuts will affect employees and operations in the US and Europe. The bank had previously announced 5,000 job cuts, 700 of which were for the UK.
HSBC is realigning its global presence and wants to recruit 15,000 new staff in Asia and Latin America over the next three years. This means that the net loss of employees could be lower than 25,000.
The bank has just announced pre-tax profits of $11.5 billion for the first six months of the year, slightly up on the profits for the same period last year.
Other cost-saving measures announced are the closures of retail banking operations in Poland and Russia and the sale of three insurance businesses. Over the weekend HSBC also said that it will sell 195 US retail branches to First Niagara Bank for about $1 billion.
The reason for the change in global corporate policy is that growth in emerging markets is much stronger than growth in developed markets and with continued economic woes for developed nations showing no sign of coming to an end, HSBC is investing in areas that are expected to help the business in the future.
In its earnings report the bank said:"Growth in the US and Europe is likely to remain sluggish as long as the impact of high debt levels and government budget cuts weigh on economic activity."
The report reveals that profits in the banks Asia-Pacific operations increased by more than 25 per cent in the six months to the end of June, compared to the same period in the previous year, and by ten per cent in Latin America.
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