HSBC slashes 1,100 jobs
Banking giant HSBC has cut 1,100 jobs in its investment banking division due to turmoil in the financial markets.
The bank revealed that it was forced to reduce the size of its workforce because of tough market conditions and the poor outlook for 2009. Although the cuts will not affect HSBC’s high street operations, 500 jobs are set to go from the bank’s Canary Wharf headquarters in London, including investment bankers and administrative staff.
HSBC has been one of the most resilient banks in weathering the credit
crunch. Half-year profits at HSBC fell by 28% to £5.2 billion last
month, as the bank was forced to write off £7 billion of bad debts
linked to the sub-prime mortgages.
The cuts are equal to about 4% of HSBC's 335,000 strong workforce, and comes as banks around the world are cutting staff and trimming costs in expectation of continued financial slowdown.
Yesterday, Bradford & Bingley, which has been hit hard by turmoil in the financial markets, revealed that it was axing 370 jobs - or a tenth of its workforce in an effort to cut costs. It has lost over 90% of its market value this year as it has struggled to finance its lending due to the ongoing credit crunch.
All sub-prime financial products are aimed at borrowers with patchy credit histories and the term typically refers to mortgage candidates, though any form of credit offered to people who have had problems with debt repayment is classed as sub-prime. Depending on the lender’s own criteria, sub-prime can apply to borrowers who have missed a few credit card or loan repayments to people who have major debt problems and county court judgments (CCJ) against their name. To reflect the extra risk in lending to people who have struggled in the past, rates on sub-prime deals are typically higher than for “prime” borrowers.