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HSBC to cut as many as 25,000 jobs as Gulliver tackles costs
[HONG KONG] HSBC Holdings Plc will eliminate as many as 25,000 jobs in cost-cutting through 2017 as Chief Executive Officer Stuart Gulliver seeks to reverse profit declines.
Europe's largest bank plans to reduce full-time employees by 22,000 to 25,000, or about 10 per cent of staff, the lender said in a presentation on its website on Tuesday.
HSBC will aim for annual cost savings of US$4.5 billion to US$5 billion by 2017 and sell businesses in Turkey and Brazil, according to a separate statement. At the same time, achieving those savings may cost US$4 billion to US$5 billion over that period, the company said.
HSBC will step up investment in Asia, expanding asset management and insurance and focusing on places including China's Pearl River Delta, the company said. Mr Gulliver, 56, is under pressure to drive a revival after a year that saw HSBC fined for manipulating currency markets and embroiled in a scandal over tax avoidance at its Swiss unit.
The company's shares rose 2 per cent as of 1:11 p.m. in Hong Kong, the biggest intraday gain in a month.
HSBC plans to reduce risk-weighted assets by about US$290 billion and will target a return on equity of more than 10 per cent by 2017, the company said. Now domiciled in the UK, HSBC will complete a headquarters review by year-end, it said.
In February, Mr Gulliver pledged that underperforming units would face "extreme solutions" after full-year earnings fell 17 per cent and the lender scrapped four-year-old profitability targets, citing a tougher regulatory environment. With regulators stepping up scrutiny, HSBC is spending billions of dollars to toughen internal controls.