HSBC shares fall despite 10,000 job cuts plan

HSBC’s interim chief executive Noel Quinn has launched a cost-saving review of its European operations with the potential loss of up to 10,000 jobs and a focus on ending duplication of roles.

However, news of the plan had a muted reception from investors, who have learned to be sceptical about such projects at the sprawling bank. The shares fell 5.3p to 596.6p.

Quinn was made caretaker boss of the bank after the ousting of John Flint for failing to implement cuts and savings fast enough.

He is reviewing all areas of the bank’s operations, particularly in Europe, where he is considering selling all or parts of HSBC’s French retail bank. It is thought the 10,000 figure, which was not confirmed by the bank, includes staff who might leave as a result of such disposals.

The new number is not part of the 4700 cuts announced in August, which HSBC said would cost between $650 million (£527 million) and $700 million in severance pay.

HSBC employs 238,000 staff worldwide.

Sources said HSBC would continue hiring in faster-growing markets, particularly Asia, where populations are becoming increasingly wealthy.

One senior executive familiar with Quinn’s thinking said he was “not obsessing” with headcount, pointing out that cutting large numbers of relatively low-paid staff would have less impact than reducing smaller numbers of high-paid ones duplicating each other’s work.

Analysts welcomed news of the plan, but said there had been “false dawns” with the bank before when it came to cost efficiencies.

Citi’s banking research team led by Ronit Ghose said while the sharper focus on profitability was to be welcomed, HSBC faced difficulties from lower interest rates and slowing growth in Hong Kong and elsewhere in Asia.

It reiterated its advice to clients to sell the stock, saying it remains concerned that the bank’s capital buffers are “tight.” HSBC’s so-called common equity tier 1 capital ratio is only 0.3% above the management’s target.