HSBC to Leave Brazil and Turkey, Cut 25,000 IT and Back Office Jobs
- The bank said it will curtail its investment banking operations but will be investing further into its foreign exchange unit
HSBC has announced that it will be revamping its business operations due to falling profitability. The largest bank by assets in Europe has detailed in an announcement that it will be selling its operations in Brazil and Turkey, essentially confirming significant worries about the sustainability of growth in the politically unstable part of emerging economies.
The bank is aiming to cut costs by $4.5 - 5.0 billion over the next couple of years and reduce its Risk Weighted Assets (RWAs) by USD 290bn, including a reduction of Global Banking & Markets RWAs to less than one-third of the total.
HSBC will still maintain a presence in Brazil, but it will only be servicing large corporate entities, catering to their international needs.
While the politically unstable countries have been identified as unnecessary risk, the bank is planning an expansion of its business in the Pearl River Delta in the Chinese province Guangdong and in the ASEAN region.
The company has also announced a total of about 50,000 job cuts, however half of those will be a result of the selling of the operations in Brazil and Turkey. From the remaining 25,000 job cuts, the most are going to occur across the back office operations and IT departments. In the UK, the company plans to shed about 8,000 jobs.
The company will focus on asset management and insurance in Asia, aiming to cater to the needs of wealthy individuals in the region.
Aside from foreign exchange, the bank will invest in its Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and Cash Management, Global Trade and Receivables Finance units. HSBC also plans to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term its dominant position in renminbi internationalization, which could be a worthwhile bet.
the world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade
The CEO of HSBC, Stuart Gulliver, commented in the announcement, “We recognise that the world has changed and we need to change with it. The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade.”
The company also added that it expects to complete its headquarters review by the end of 2015. A couple of months ago, HSBC stated that it was evaluating the option to change the location of its global headquarters due to its business shifting to Asia. It could be months before somewhat anxious U.K. employees of the company know if the bank is undertaking this major step.
HSBC has announced that it will be revamping its business operations due to falling profitability. The largest bank by assets in Europe has detailed in an announcement that it will be selling its operations in Brazil and Turkey, essentially confirming significant worries about the sustainability of growth in the politically unstable part of emerging economies.
The bank is aiming to cut costs by $4.5 - 5.0 billion over the next couple of years and reduce its Risk Weighted Assets (RWAs) by USD 290bn, including a reduction of Global Banking & Markets RWAs to less than one-third of the total.
HSBC will still maintain a presence in Brazil, but it will only be servicing large corporate entities, catering to their international needs.
While the politically unstable countries have been identified as unnecessary risk, the bank is planning an expansion of its business in the Pearl River Delta in the Chinese province Guangdong and in the ASEAN region.
The company has also announced a total of about 50,000 job cuts, however half of those will be a result of the selling of the operations in Brazil and Turkey. From the remaining 25,000 job cuts, the most are going to occur across the back office operations and IT departments. In the UK, the company plans to shed about 8,000 jobs.
The company will focus on asset management and insurance in Asia, aiming to cater to the needs of wealthy individuals in the region.
Aside from foreign exchange, the bank will invest in its Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and Cash Management, Global Trade and Receivables Finance units. HSBC also plans to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term its dominant position in renminbi internationalization, which could be a worthwhile bet.
the world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade
The CEO of HSBC, Stuart Gulliver, commented in the announcement, “We recognise that the world has changed and we need to change with it. The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade.”
The company also added that it expects to complete its headquarters review by the end of 2015. A couple of months ago, HSBC stated that it was evaluating the option to change the location of its global headquarters due to its business shifting to Asia. It could be months before somewhat anxious U.K. employees of the company know if the bank is undertaking this major step.