Hire Wire Apr 25 2012

HSBC Set To Slash 2,000 U.K. Jobs

By max colchester

LONDON—HSBC Holdings PLC is set to cut 2,000 jobs in the U.K., as the lender looks to slim down its operations ahead of regulatory changes in coming months, according to a person familiar with the matter.

The cuts mainly affect back-office functions in the company's retail banking arm and are part of the 30,000 job reductions that HSBC Chief Executive Stuart Gulliver announced last year, this person said. HSBC employs 52,000 people in the U.K. HSBC declined to comment.

Like other U.K.-based banks, HSBC is bracing for a wave of regulatory changes. In June, the U.K. government is expected to detail rules requiring lenders to segregate retail activities from riskier investment-banking businesses in order to better protect depositors.

Separately, impending new regulations are expected to bring about a decline in the number of customers seeking financial advice beginning early next year.

HSBC is conducting a review of all its global businesses as it looks to focus on only its most profitable markets. HSBC is targeting a return on equity of about 12% by 2013 and wants to cut its cost-to-income ratio to 52%. The bank recorded a return on equity of 10.9% in 2011. It is reducing its global exposure and concentrating on bulking up its presence in a few markets that trade with each other.

The U.K. is HSBC's biggest profit generator in Europe. The 2,000 cuts are set to be officially announced Thursday, according to a person familiar with the matter.

This story first appeared on WSJ.com

Write to Max Colchester at max.colchester@wsj.com




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