HSBC claims bank reforms could increase UK job cuts
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Your support makes all the difference.HSBC has announced plans to axe 30,000 jobs, or 10 per cent of its global workforce, over the next three years and warned that redundancies could be even higher if the UK adopts a hardline approach to banking reform.
Unveiling a 3 per cent rise in first half pre-tax profits to $11.5bn, the group stepped up pressure on Sir John Vickers ahead of his final report on UK banking reform next month. Stuart Gulliver, HSBC's chief executive, argued that stringent regulations requiring banks to ring-fence their retail operations could increase its job losses in Britain and "inform" the review into whether to move the group's London headoffice overseas.
Mr Gulliver said the 30,000 job losses did not include any that may arise from regulatory changes, adding "it will be very difficult to forecast what employment or the shape of the business in the UK will be until we know the recommendations".
The bank's warning came as the group revealed it missed its target for lending to small and medium sized British businesses in the first half. Under the government's Project Merlin initiative, HSBC agreed to step up lending to SMEs to £11.7bn for the year – implying £5.85bn in the first half – but it only lent £5.6bn. However, the bank is on course to meet its total lending target, making £22.7bn of new facilities available, compared with a full-year target of £38.8bn.
HSBC reported a 131 per cent jump in profits at its retail banking and wealth management unit and a 31 per cent increase in its commercial banking division. The bank benefited in particular from a 30 per cent decline in loan impairment charges to $5.3bn as it continued to run down its disastrous US Household International business.
This helped HSBC to weather a 12 per cent slump in investment banking profits as the European debt crisis hit trading revenues hard. HSBC's UK retail bank reported a 29 per cent rise in pre-tax profits to £843m.
Some 5,000 of the job losses announced yesterday have already been identified and they include 700 positions in the UK announced in June.
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