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HSBC to cut 25,000 more jobs
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CBC News- British banking group HSBC said Monday it will cut 25,000 more jobs worldwide by 2013 and sell almost half its retail bank branches in the U.S., part of a new strategy to focus on fast-growing emerging markets.
The bank, which reported a better-than-expected three per cent increase in pretax profits to $11.5 billion US in the six months to June, has already cut 5,000 jobs this year. Another 25,000 will be slashed by 2013, spokesman Patrick Humphris said.
HSBC currently employs around 296,000 people worldwide.
Humphris wouldn't give details about where the job cuts would be made, but said the group is still hiring in emerging economies such as Brazil and Mexico.
The move echoes similar announcements by other global banks, such as Credit Suisse, UBS and Goldman Sachs, which in recent weeks said they needed to trim payrolls to adjust to tougher market conditions.
As part of its restructuring, HSBC will sell 195 retail banking branches in the United States to First Niagara Bank for around $1 billion. Most of the branches to be sold are in New York, with six in Connecticut.
The bank is still dealing with the legacy of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. The acquisition made HSBC the biggest subprime lender in the United States at the time, which resulted in billions of losses leading up to the financial crisis of 2008.
"I am pleased with the results, which mark a first step in the right direction on what will be a long journey," new chief executive Stuart Gulliver said in a statement.
News of the bank's overhaul and its profit — earnings per share rose to 51 cents in the first half from 38 cents a year earlier, allowing for a 12.5 percent dividend increase to 18 cents — boosted the company's share price.
Gulliver said in a statement that he expects financial markets worldwide to remain volatile this year and in 2012. He predicted growth in the U.S. and Europe would remain sluggish, weighed down by high debt levels and government budget cuts, but that Asia-Pacific and Latin American would continue to grow.
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