HSBC to cut 1,100 jobs worldwide

[Garlic]

Source: http://sg.news.yahoo.com/afp/20080926/tts-...in-972e412.html

 

 

HONG KONG (AFP) - - Banking giant HSBC is to cut 1,100 jobs worldwide because of the volatile global financial environment, a spokesman said Friday.

 

The cuts will be made in the global banking and market division, with around half of those losing their jobs in HSBC's British operations, Hong Kong-based spokesman Gareth Hewett said.

 

"The steps we have taken today are in the light of the current global business and economic environment and our cautious outlook for 2009," he said in a statement.

 

"Markets continue to be challenging and difficult but our strategy leaves us well positioned for the next wave of global growth, when it comes."

 

Around 100 jobs will go in Hong Kong. The jobs would be cut in both front and back office operations, Hewett said.

 

The statement said that global pre-tax profits for the division were 2.7 billion dollars in the first half of 2008, down 35 percent over the first half of 2007 but 37 percent higher than in the second half of 2007.

 

HSBC employs around 330,000 people worldwide. The global banking and market division includes investment banking, treasury and trading operations.

 

The market reacted positively to the news of job cuts. Hong Kong-traded shares of HSBC were up 0.5 percent at 2:30 pm (0630 GMT) against a falling overall market.

 

Global markets have been in the doldrums for the past year over worries about access to credit, stemming from the dire state of the US housing market and unwise lending.

 

The situation has worsened in the past two weeks as major financial institutions have required government-backed rescue packages, and investment banking giant Lehman Brothers was forced into bankruptcy.

 

HSBC was one of the first banks to warn of the problems among products linked to the high-risk US mortgage sector. The British-based bank's US division has suffered diminishing profits as a result of the credit crisis.

 

Last week, the bank said it had scrapped a six billion dollar deal to buy a major South Korean bank after the financial crisis cut asset values worldwide.

 

HSBC said in it had terminated the deal to buy a 51 percent stake in Korea Exchange Bank (KEB) from US buyout fund Lone Star, "taking into account all relevant factors including current asset values in world financial markets."

[Nkps]