Posts tagged "HSBC"

HSBC chairman backs No campaign in Scottish independence referendum

HSBC chairman backs No campaign in Scottish independence referendum

Douglas Flint voices explicit agreement with pro-union remarks made by George Osborne at conference debate. Read more…

Posted by admin - June 5, 2014 at 08:26

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HSBC recruits former MI5 chief

HSBC, fined £1.9bn last year for money laundering, appoints Sir Jonathan Evans as independent non-executive director

HSBC – Britain’s biggest bank, which was last year fined $1.9bn (£1.3bn) for acting as banker for rogue states, terrorists and drug lords – has recruited the former director general of MI5 to join the board.

Sir Jonathan Evans will be paid £125,000 a year as an independent non-executive director. He will also become a member of the financial system vulnerabilities committee, which has been set up to help the bank identify areas where it could be exposed to financial crime.

Evans worked for the security services for 33 years, heading MI5 from 2007 until his retirement last month. HSBC cited his experience in “counter-terrorism, both international and domestic including, increasingly, initiatives against cyber threats”.

HSBC’s chairman, Douglas Flint, said Evans’s “experience and expertise gained from a career at the highest level of public service combatting threats to data security, critical infrastructure and from international terrorism and organised crime will be of considerable value to the board as it addresses its governance of systemic threats”.


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Posted by admin - May 31, 2013 at 15:05

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Dave Hartnett: one sweetheart deal too many

The hardman ended his career by becoming a soft touch. His appointments to Deloitte and HSBC won’t alter that reputation

Until last summer the country’s top tax official, Dave Hartnett is taking up a job with tax consultancy Deloitte. Does this matter? Yes, it does; both in its specifics, and the light it casts on the relationship between our governing elite and corporate interests.

Mr Hartnett left Her Majesty’s Revenue and Customs amid some controversy. It is not every civil servant who is accused of being a liar, as he was by Margaret Hodge. The chair of the public accounts committee accused him of lying over his claim that he did not deal with the tax affairs of Goldman Sachs. He had in fact struck a “sweetheart deal” with the bankers, letting them off a £10m interest bill. That revelation sat alongside other tittle-tattle such as his standing as the most wined and dined official in Whitehall, eating 10 meals with KPMG alone over three years. One doesn’t need to buy the accusations of a meals-for-deals strategy to see in all this a too-cosy relationship between the regulator and the businesses that he regulated. Even other tax professionals went along with that, especially outside the Big Four. Such criticism was justified by Mr Hartnett and his pushing of “enhanced relationships” with big companies. The commissioner might initially have intended the concept to denote more open dealing with big taxpayers and less of the old cat-and-mousery; but it ended up as a variant of the now-familiar light-touch supervision.

The great disappointment is that Mr Hartnett set out to be a much tougher taxman. It is hard to think of any senior official with as in-depth a knowledge of tax law, or with as great renown as a bruiser. Mr Hartnett was a Revenue lifer, yet the hardman ended his career by becoming a soft touch. His appointments to Deloitte and HSBC won’t alter that reputation. Mr Hartnett will help Deloitte to advise overseas governments on how to implement “effective tax regimes”, which seems rather like dispatching the top brass of Stella Artois to advise on alcohol abuse. The contrast between his soft landing and the brutal treatment administered to Osita Mba, the whistleblower who exposed the Goldmans deal, is stark and troubling.

Provision must be made for top public servants to move on to other jobs, but the current system is not robust enough at detecting possible conflicts of interest. In its emphasis on avoiding personal lobbying of ministers and advisers by former colleagues, the advisory committee on business appointments pays too little attention to how they might otherwise massage relations between a company and Whitehall. It is thus worryingly narrow in how it interprets possible overlaps of corporate interest. The system must be recast to adopt a precautionary principle in looking for possible dangers of abusing insider expertise.


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Posted by admin - May 28, 2013 at 22:44

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‘Big four’ banks cut 189,000 jobs worldwide in five years

Lloyds, HSBC, RBS and Barclays’ headcount drops to nine-year low, as profits surge and unions say worse is yet to come

By the end of this year Britain’s four biggest banks will have axed 189,000 jobs around the world in the five years since the financial crisis broke, according to new calculations.

The figures compiled by Bloomberg show that Royal Bank of Scotland, Lloyds Banking Group, Barclays and HSBC will have cut their global headcount by 24% to a nine-year low of 606,000, compared with their pre-crisis peak of 795,000 in 2008.

Royal Bank of Scotland Holdings has axed 78,000 jobs since its £45bn taxpayer bailout in 2008. This includes 4,000 roles in its UK high-street banking business. Sir Philip Hampton, chairman of the bank that is now 81% owned by the taxpayer, told shareholders earlier this month that further job cuts could not be ruled out.

An RBS spokeswoman said the 78,000 job losses included 39,000 staff who had worked for Fortis and Santander when the three banks joined forces to launch a takeover of Dutch rival ABN Amro in 2007. This is now seen as one of the most disastrous acquisitions in business history, squeezing RBS’s capital buffers to tiny margins and exposing the Edinburgh-based bank to rotten US subprime loans.

HSBC, Europe’s largest bank, is down to 254,000 staff compared with 313,000 in 2008. The bank infuriated unions last month when it described 3,166 job losses as “demising” roles.

HSBC chief executive Stuart Gulliver plans to slim down the bank further, cutting staff to 240,000 by the end of 2016 to trim costs and boost shareholder dividends.

An HSBC spokeswoman said the bank had made a “net” reduction of 1,100 jobs in the UK, once new positions were taken into account.

Lloyds, which received a £20.5bn bailout in 2008, will have cut 31,000 jobs by the end of this year, including 2,340 job losses in 2013. The bank, now 39% owned by the British taxpayer, announced 850 job losses this month to cut costs, but was unable to give figures on how many of its 31,000 job losses were in the UK.

Barclays chief executive Antony Jenkins, appointed to clean up the bank after the Libor-rate rigging scandal, has said it could cut 40,000 roles in the coming years. Barclays will have cut 20,800 jobs by the end of this year since the start of the crisis. This includes around 5,500 jobs lost in the UK between 2008-12.

The figures come after three of the four banks have reported sharply improved profits. Last month Lloyds posted first quarter profits of £2bn, up from £288m at the same time a year ago. HSBC this month said it made a quarterly pre-tax profit of $8.4bn, almost double the $4.3bn it reported at the same time last year. RBS swung to a £826m profit after a £1.4bn loss last time. Barclays last month reported adjusted first quarter profits have fallen 25% to £1.8bn, partly due to the cost of the bank’s restructuring programme.

Andrew Case at the Unite trade union described the job cuts as unjustified. He said: “The amount of jobs we are seeing disappear from the banks is concerning and at the moment we would be foolish to be complacent that we have seen the last of it.

“We expect all banks to do everything they can to avoid job losses and we want, we expect more from banks that are owned by the public. The last thing the public want, I am sure, is for banks to be shedding jobs and for people to be collecting benefits that the taxpayer pays for.”

Case said it was a myth that all bankers were millionaires. “The vast majority of staff that work for banks are quite modestly paid, some quite low paid, just like other working people.”

Giorgio Questa, a visiting professor at Cass Business School, said one reason for the job losses was the shift in investment banking activity to “quasi banks”, such as hedge funds, in the wake of government reforms.

The government had put in place “sub-optimal reforms”, he said, following a report by Sir John Vickers that recommended ringfencing high street banks from their “casino” investment banking arms.

“Bank regulation, which has not followed the ideas of the Vickers report, which was the best way of looking at things, is sort of stifling the activity of banks in a number of sectors,” he said. “It means that a lot of activities [now] not done by banks are being done by quasi banks.”

City analysts expect job losses to keep on coming, as technology replaces jobs that people once did and the banks attempt to trim their wage bills to meet profit targets promised to shareholders.


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Posted by admin -  at 22:42

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HSBC under fire from all sides at AGM

Bank sees 11% of shareholders vote down the pay report as it is attacked by environmental campaigners, shareholders, former staff – and Bill Oddie

Angry shareholders of HSBC on Friday bombarded the group’s board with barrage of accusations ranging from financing Mexican drug cartels to supporting tax havens, slashing jobs and mis-selling products.

At the banking firm’s first annual general meeting since paying a record $1.9bn (£1.2bn) in penalties to settle US money laundering claims, they also rounded on the directors with charges of hunting down whistleblowers and grabbing bloated bonuses.

Environmentalist and broadcaster Bill Oddie joined the tirade of attacks in London’s Barbican Centre, accusing the bank of financing the desecration of forests in Sarawak and Borneo. Outside the AGM, campaigners from World Development Network confronted bankers with champagne flutes filled with ‘carbon bubbles’ to protest against the bankrolling of climate change, while street theatre performers heckled arriving executives.

Inside the auditorium, one shareholder unfolded an orange jumpsuit and suggested that HSBC board members swap their suits and ties for prisoner garb. A former staff member, now retired, appealed to the board to claw back bonuses paid to directors following scandals such as the mis-selling of PPI and interest rate swaps, and warned that interest-only mortgages would be the next scandal to envelop the bank.

HSBC chairman Douglas Flint told the hundreds of shareholders present that the bank had “unreservedly apologised” and was “humbled and horrified to find failings of such magnitude” after a year which had been “the most difficult that I or any of my colleagues have faced.” HSBC has since established a “financial system vulnerabilities committee” to better detect crime and misdemeanours in future. Chief executive Stuart Gulliver said he had joined the bank 33 years ago when it was “a kitemark for quality and that’s what we want to get back to”.

But the apologies failed to quash an embarrassing 11% shareholder rebellion against HSBC’s executive pay report. The bank’s pay schemehad handed Gulliver a near £2m annual bonus despite the bank’s involvement in a string of high profile scandals.

David Haslam of Methodist Tax Justice Network won cheers from scores of small shareholders after he asked Flint if he recognised the “very strong feeling that bankers are paid too much money”.

But the bank said Gulliver’s bonus was awarded in recognition of his “strong leadership” and “personal behaviour” in tackling the money laundering revelations.

Gulliver’s total pay and benefits for 2012 came in at £7.4m – more than 500 times that earned by the bank’s lowest paid workers. A total of 204 HSBC staff were handed more than £1m in pay and benefits last year.

Britain’s biggest union, Unite, described the scale of the pay as an “outrage” given that some of its members at HSBC take home £14,000 a year and are facing changes to their pension schemes and holidays.

In an AGM that divided between conventional shareholders worried about scrip dividends and earnings per share, pitted against protestors who had gained a platform by purchasing a few shares, Gulliver said the bank’s top priority was returns to shareholders, followed by global standards and streamlining the business. Flint added that despite “tumultous times” the bank’s share price had risen from 514p a share to 742p since the preceding AGM, and that its market value had jumped from $144.6bn to $208.1bn.

Bill Oddie said that while HSBC had offered numerous apologies for the financial damage it had caused, “there has been no mention of the environmental damage it is causing to wildlife habitats. That is a major crime, and HSBC has been financing that crime. In Sarawak, 95% of the natural forest has been damaged. It is a huge desecration, and at root it has been funded by HSBC.” Earlier this year Oddie was evicted from HSBC’s London headquarters when filming a spoof documentary examining “the natural habitat of the HSBC banker, a predatory species driving rainforest destruction”.

Gulliver said that HSBC is the first major bank to put in place a policy framework for logging and timber and promised it was not mere “lip service”. He also warned Oddie: “If HSBC exits from the business, regional banks will enter and you will have no leverage over them.”


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Posted by admin - May 24, 2013 at 18:15

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HSBC suffers investor revolt over pay

Some 11% of shareholders rebel against pay scheme, which includes £2m bonus for chief executive Stuart Gulliver

HSBC suffered an embarrassing 11% shareholder rebellion against its executive pay report on Friday.

Douglas Flint, chairman of the bank, said just 89% of investors voting ahead of its annual meeting supported its pay scheme, which handed chief executive Stuart Gulliver a near £2m annual bonus despite the bank’s involvement in a string of high profile scandals, including helping Mexican drug barons launder money.

The bank said Gulliver’s bonus was awarded in recognition of his “strong leadership” and “personal behaviour” in tackling the revelations that led to the bank being fined £1.2bn by US authorities for allowing at least $880m (£582m) of drug trafficking money to be laundered throughout the bank’s accounts.

Gulliver’s total pay and benefits for 2012 came in at £7.4m – more than 500 times that earned by the bank’s lowest paid workers.

A total of 204 HSBC staff collected more than £1m in pay and benefits last year.

Britain’s biggest union, Unite, described the scale of the pay as an “outrage” given that some of its members at HSBC take home £14,000 a year and are facing changes to their pension schemes and holidays.

The bank did not immediately state how many of its investors abstained from the pay vote, which could increase the proportion of shareholders failing to back the remuneration report. It will report the full numbers to the London stock exchange this afternoon.

Earlier on at the AGM in the Barbican centre, in central London, Flint apologised to shareholders for the bank’s role in a series of “extremely damaging” scandals, including rigging the Libor interest rate, PPI mis-selling and money laundering for Mexican drug cartels and terrorists.

Flint said the bank had already “apologised unreservedly” to stakeholders and has paid “huge penalties both in monetary cost and reputational damage”. But said he wanted to “apologise again in person”.

“As you will all be acutely aware, the last two years have been extremely damaging to HSBC’s reputation and to our own perception of ourselves,” he said. “We experienced serious historical failings both in the application of our standards and in our ability to identify, and so prevent, misuse and abuse of the financial system through our networks.”

He said the bank had been given a “huge wake-up call” and HSBC was “determined to play a leading part in restoring the reputation of the industry and thereby regaining society’s trust”.

“We need to prove that a strong economy needs a strong banking sector,” he said. “More important than apologies, however, are the steps being taken to prevent recurrence.

“We have a once-in-a-generation opportunity to reform banking and the broader financial industry.

“We need to demonstrate that the business model of banking is fair, transparent, sustainable and meeting its core purpose of serving society.”

The bank has created a new financial system vulnerabilities committee of five experts to “identify areas where HSBC may become exposed to financial crime or system abuse”.

“Their expertise includes the combating of organised crime, terrorist financing, narcotics trafficking, tax evasion and money laundering as well as expertise in intelligence gathering and international payments systems,” Flint said.

The bank agreed in December last year to pay a $1.9bn fine to US authorities to settle money laundering charges, but the deal has been delayed by a row between the justice department and the judge overseeing the case.

The deal – known as a deferred prosecution agreement (DPA) – meant HSBC was exempt from prosecution and triggered a storm of criticism. Judge John Gleeson is now believed to be considering rejecting the deal, a move that could leave HSBC facing a criminal prosecution and the threat that its charter to do business in the US could be revoked.

US authorities reached the deal with HSBC last December after uncovering evidence that the bank had illegally conducted transactions on behalf of Mexican drug lords, terrorists and customers in Cuba, Iran, Libya, Sudan and Burma – all countries that were subject to US sanctions.


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Posted by admin -  at 18:14

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HSBC faces court threat as deal on money laundering charges stalls

Judge may take action that could leave HSBC facing a criminal prosecution and threat to its ability to do business in the US

HSBC’s controversial $1.9bn (£1.6bn) settlement deal with the US authorities over money laundering charges has stalled after a row between the justice department and the judge overseeing the case.

The deal – known as a deferred prosecution agreement (DPA) – meant HSBC was exempt from prosecution and triggered a storm of criticism. Judge John Gleeson is now believed to be considering rejecting the deal, a move that could leave HSBC facing a criminal prosecution and the threat that its charter to do business in the US could be revoked.

The bank will hold its annual meeting in London on Friday and is expected to be asked for an update on the agreement.

US authorities reached the deal with HSBC last December after uncovering evidence that the bank had illegally conducted transactions on behalf of Mexican drug lords, terrorists and customers in Cuba, Iran, Libya, Sudan and Burma – all countries that were subject to US sanctions.

Gleeson, a former assistant attorney general, made his name prosecuting drug rings and organised crime, most notably securing the conviction of John Gotti, the Gambino crime family boss. The justice department is believed to be challenging the need for Gleeson’s approval after failing to get a quick signature while the judge is upholding his opinion that he must sign off on the DPA.

Court officials would not comment on the case. The judge last referred to the case on 15 February, noting solely that he had not yet approved or disapproved of the settlement. Last December Gleeson said there had been “much publicised criticism” of judges rubber-stamping DPAs.

The agreements are an increasingly common settlement which allow a company to pay a fine to stop a criminal prosecution.

John Coffee, Adolf A Berle professor of law at Columbia University, said judges were increasingly unhappy with DPAs.

“There is a serious disconnect between judges and prosecutors about whether prosecutors are doing anything meaningful,” he said.

Senator Chuck Grassley lambasted the justice department over the settlement last year and said it was “inexcusable” that they had not brought a criminal prosecution against the bank. “What I have seen from the department is an inexplicable unwillingness to prosecute and convict those responsible for aiding and abetting drug lords and terrorists. I cannot help but agree with an editorial in the New York Times that ‘the government has bought into the notion that too big to fail is too big to jail’,” he wrote in a letter to attorney general Eric Holder.

At the time of the deal’s announcement Stuart Gulliver, HSBC chief executive, said: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again.”

HSBC has undergone a drastic management overhaul since the issues came to light and has strengthened its compliance policies and procedures. It is continuing to implement those changes as the US authorities work on a resolution to the DPA disagreement.

Stuart McWilliam, senior campaigner with lobby group Global Witness, said: “News that the DPA hasn’t yet been signed off gives the justice department a clear opportunity to reconsider the penalties HSBC should face for its widespread money laundering failures.

“Given that over 35,000 people were brutally slain in Mexico at the hands of drug traffickers while HSBC laundered at least $880m of their money, it’s shocking that the current system of sanctions does not include senior executives being held personally responsible for the actions of their institutions. Is HSBC too big to jail?”

Gleeson would not be the first judge to challenge a DPA in recent months. Last year Jed Rakoff refused to sign off on an agreement between Citigroup and the Securities and Exchange Commission over the sale of “toxic” mortgage bonds. In his opinion the $285m settlement was “neither reasonable, nor fair, nor adequate, nor in the public interest”. That dispute is ongoing.


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Posted by admin - May 23, 2013 at 20:29

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Wrong sort code meant £3,000 went into a stranger’s account

My father accidentally transferred cash into someone else’s bank account. How can we get it back?

In January my father tried to transfer £3,000 into my Co-operative Bank savings account from HSBC using telephone banking. Unfortunately, he used the correct account number, but the wrong sort code at the Co-op. Ever since, he has been jumping through hoops to recover the money. The Co-op appears to be less than helpful and it feels like we are getting nowhere.

From what we can gather HSBC, (after much prompting) has requested that the Co-op looks into the matter, and, although there appears to be a lot of talking in riddles (due to the Data Protection Act), we can deduce that there is a bona fide account with this sort code and account number at the Co-op that the money has gone into. HSBC has (again after much prompting) asked the Co-op to contact the beneficiary account holder.

The Co-op tells me, in a very vague way, that it looks like it has done this once by phone and has also sent a letter. But the beneficiary account holder is refusing to answer. However, the Co-op has also said that, even if it does manage to talk to them, it cannot ask for the money back if the beneficiary says they were expecting the money and it is theirs.

The Co-op has now sent me a letter saying there is nothing more it can do, while HSBC is giving my father the impression that it is washing its hands of the matter. HSBC has told him to contact Citizens Advice.

This he has done and has been told his only option is to hire a solicitor, and this is likely to end up costing more than the £3,000 that is missing.

I am also fairly certain that the law is on his side with regards to ownership of the money. Can you help? JW, Cambridge

We have been getting an increasing number of letters like this and are coming to the conclusion that the banking industry needs to make some changes to tackle this growing problem.

It has mostly come about as a result of the rise in internet banking. People may use the wrong digit, or whole sort codes as in your case, and the money disappears into someone else’s account. As you say, it is still legally yours but as you, and others show, it’s very difficult to get it back, particularly if the receiving account declines to help, either deliberately or because they no longer use the account and are unaware of the problem. There doesn’t appear to be any rules for the banks to follow.

We asked the Co-op to trace your father’s money and it has, at least, got on the case. “Where a credit appears to have been paid in to one of our accounts incorrectly, the bank will assist as far as possible to retrieve it,” says a spokeswoman.

“It is not as straightforward as simply taking the money back, as there are legal obligations which we need to meet. We are making attempts to contact the account holder that has received the credit. If no contact is received we plan to return the money to the sending bank.”

After our intervention, the Co-op said this week that the money has now been sent back to your father.

Meanwhile, other readers using the web to send large sums to another account are advised to send a small amount first. Once you have confirmed its arrival, you can send the larger amount using the same transfer.

In February, Guardian Money carried the story of Sally who lost two years’ pay – £26,000 – after mis-typing a digit during an online transfer. She took her case to the Financial Ombudsman but it was rejected. The Ombudsman relied upon the Payment Service Regulations 2009 which says: “Where the unique identifier provided by the payment service user is incorrect, the payment service provider is not liable for non-execution or defective execution of the payment transaction, but the payment service provider must make reasonable efforts to recover the funds.”

We welcome letters but cannot answer individually. Email us at consumer.champions@guardian.co.uk or write to Bachelor & Brignall, Money, the Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number


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Posted by admin - May 20, 2013 at 08:09

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HSBC job cuts foretell banking’s future | Nils Pratley

A bank that employed 300,000 staff in 2011, and has 254,000 today, wants to have 240,000 by the end of 2016

The future’s bright, the future’s job cuts. That wasn’t how HSBC put it, but you get the gist. A bank that employed 300,000 staff in 2011, and has 254,000 today, wants to have 240,000 by the end of 2016.

All that slimming hasn’t enabled the chief executive, Stuart Gulliver, to meet his original cost-to-income target. HSBC is at 55%, against a target of 48%-52%, but that’s partly because revenues have disappointed. Never mind, victory has been declared anyway on the grounds that revenue growth is still beating cost growth.

HSBC’s tale, one suspects, will be the entire banking industry’s for several years. In a lower-growth world where technology can do more of the work, job losses will keep coming.

Nils Pratley


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Posted by admin - May 15, 2013 at 18:45

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HSBC warns on jobs as cost-cutting continues

In a strategy update, bank shifts focus to fast-growing markets and considers bigger dividend payouts to shareholders

Some 14,000 more jobs are at risk at HSBC as chief executive Stuart Gulliver wields an axe to reduce costs, boost profitability and pay bigger dividends to shareholders.

By 2016, he expects HSBC to employ around 240,000 staff, compared with the 300,000 who worked for the bank when he was promoted to chief executive at the start of 2011.

Still implementing reforms prompted by a record-breaking £1.2bn fine from the US authorities for helping Mexican drug barons launder money, Gulliver said the changes he had made to the UK’s biggest bank since being promoted from running its investment banking arm was making the organisation easier to manage.

“HSBC is now simpler and easier to manage,” he said, adding the bank would “de-risk our operations in higher risk locations”.

“We will continue to exert tight cost discipline whilst streamlining processes and procedures. This enables us to invest in growth and global standards,” Gulliver said in this third annual strategy day.

Adopting a motto for staff of “courageous integrity”, Gulliver had cut the workforce to 260,000 by the first quarter of this year, and since then another 6,000 roles have gone – split between Panama and the UK, where 3,166 job cuts announced last month were described by the bank as “demising” roles.

When he first set out his proposals to cut costs by axing jobs in 2011, he said 30,000 jobs would go by the end of this year but he is ahead of target, with 26,000 having been cut through cost reduction measures and 14,000 through businesses being sold off.

He is not, however, on track to meet his target to increase the return on equity – a key measure of performance for shareholders – from 8.4% to between 12% to 15%. By 12 noon the shares were up 1% at 754p.

The job cuts are part of a plan to seek additional cost savings of $3bn (£1.9bn) between 2014 and 2016 but even so Gulliver loosened a key efficiency measure – the cost-income ratio – from the 48% to 52% range he had set previously to “mid 50s”.

Unlike many European-based banks which are under pressure to find ways to build up more capital, HSBC is now preparing the way to pay out larger dividends to shareholders and might begin share buybacks.

HSBC is already the second largest dividend payer in the FTSE 100 – paying out £4.4bn last year – second only to oil company Shell. But the bank would need approval from the Prudential Regulation Authority to pay more dividends and conduct share buybacks, probably after asking shareholders for approval at the annual general meeting next May.

Gulliver is focusing the bank on faster-growing markets with a focus on commercial banking rather than high street banking.

The proportion of earnings retained for capital is being reduced to 45% from 50% allowing 40%, rather than 35%, to be paid out to shareholders and 15% being used to pay bonuses to the remaining staff. Share buybacks could start in the middle of next year as the bank attempts to control the number of shares in issue because 30% of its shareholders, particularly in Hong Kong, receive their dividends in shares (known as a scrip dividend) rather than cash.

Jill Treanor


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Posted by admin -  at 13:55

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