A warning by banking giant HSBC that up to 30,000 posts could be cut worldwide over the next two years will not affect its plans for expansion in Scotland.
Chief executive Stuart Gulliver revealed yesterday that the bank’s restructuring plan could lead to the loss of up to 30,000 positions, despite the company reporting better-than-expected profits for the last six months.
In the UK, where the company has nearly 1300 branches and employs 52,000 people, profits rose by 29% to £843 million. Total profit rose by 3% to £7 billion.
However, only six of those branches are in Scotland. In March the bank announced a £9 million programme of investment that will double the number of branches north of the border, creating more than 100 jobs.
This will include HSBC’s first branch in Dundee, which will employ 19 people. Although a location has not been confirmed, it will be provide both a commercial and retail centre.
New branches have also been confirmed for Aberdeen and Stirling, while the bank is looking at opening up others in Hamilton, Dumfries and Falkirk.
A spokesman for HSBC said yesterday the bank is “committed” to expansion in Scotland, although it will be withdrawing from several countries, such as Russia and Poland, where its operations are too small to benefit from “economies of scale.”
He said, “We don’t have a particularly large presence in Scotland and we are committed to increasing the number of branches.
“Although around 25,000 roles around the world may be lost, it is impossible to predict what the total number of employees will be at any one time as, although some jobs will be affected, we will be recruiting in other areas at the same time, such as Scotland.Sustainable”In the UK we believe the number of employees we have is sustainable and we don’t envisage any significant or dramatic job losses.”
The bank will look to sell off branches in countries such as the US, Russia and Poland, and Mr Gulliver said the job cuts would be targeted at back office, head office and support operations in a bid to reduce overheads.
He added the 30,000 reduction is a gross figure as there will be additions in regions such as Asia and Latin America, where HSBC saw the strongest revenue growth in the first half.
HSBC has a staff turnover of between 10% and 15% and Mr Gulliver said the cuts would reflect this rate of attrition.
He said 5000 of the planned job cuts had already taken place, including 700 in the UK that were announced in June as a result of regulatory changes to the way financial advice is allowed to be given.
However, unions said the bank must give more assurances to their staff in the UK.
Yesterday’s results revealed HSBC is on course to meet its targets for business lending agreed with the government under Project Merlin, having loaned £22.7 billion.
The group was behind on small firm lending, with £5.6bn advanced in the first six months against a full year goal of £11.7bn.
Mortgage lending rose by 35% to £6.7 billion and HSBC’s share of the UK mortgage market rose to a record of nearly 11%.