HSBC, Britain’s biggest bank, is cutting 25,000 jobs, including 8,000 in the UK, as part of a £3.25 billion cost-cutting exercise that will see the retail and investment banking businesses reduced in size.
It will make a decision by the end of the year on whether to switch its headquarters from Britain, probably to Hong Kong.
The HSBC name will disappear from Britain’s high streets once it has completed the work of ring-fencing its customer-facing business under new rules. No decision has been taken on the new name, but it may resurrect the Midland, the bank it acquired 20 years ago, or use the FirstDirect brand. About 12% of branches will close.
It has 48,000 staff in the UK, including 26,000 in its retail banking operation, of which about 10% are in Scotland.
Chief executive Stuart Gulliver said that it was redefining the “purpose of the company” and refocusing on where economic growth is taking place, a comment that may suggest it will relocate its headquarters to the Far East.
“HSBC is now undertaking a significant reshaping of its business portfolio. It is redeploying resources to capture expected future growth opportunities and adapting to structural changes in the operating environment,” it said in a statement.
It intends to sell its operations in Turkey and Brazil, but plans to maintain a presence in Brazil to serve large corporate clients with respect to their international needs.
It will accelerate investments in Asia, particularly in China, and in the ASEAN region. Asset management and insurance in Asia will be expanded with the aim of capturing expected opportunities from emerging wealth in the region.
Mr Gulliver said: “HSBC has an unrivalled global position: access to high growth markets; a diversified universal banking model with strong funding and a low risk profile; and strong internal capital generation with industry leading dividends.
“We recognise that the world has changed and we need to change with it.”
A decision on the location of the HQ, together with the sale of assets and investment in the Far East are among ten strategic actions that Mr Gulliver said will further transform the organisation.