HSBC is to shed 8,000 UK jobs and potentially rebrand its retail banking unit.
The announcement has not been received well by the markets, as the FTSE 100 and FTSE 250 were both down in today's (June 9th) morning trading.
It represents a significant reshaping of the bank's business portfolio, but the majority of job cuts are expected to be achieved through "natural attrition". Around 3,000 people leave the company every year at the moment.
HSBC has to separate its domestic retail business by 2019, and there are suggestions it may choose to sell off this arm if regulators do not let the bank have a say over future strategy.
"The question for us will be around our ability to control the dividend coming from the ring-fenced bank and to make sure that the strategy of the ring-fenced bank is complementary to the strategy of the group," said HSBC CEO Stuart Gulliver.
HSBC has already announced it will relocate its British retail and commercial banking business to Birmingham in central England, while sources claim the retail arm could be rebranded under the Midland banner.
The job losses are part of radical changes being implemented worldwide – in total, 25,000 positions are expected to be scrapped.
Despite the current challenges facing the bank, Mr Gulliver is confident about its long-term strategy. "HSBC has an unrivalled global position: access to high growth markets; a diversified universal banking model with strong funding and a low risk profile; and strong internal capital generation with industry leading dividends," he added.
The bank is going to consult with both staff and customers over the next few months to see what its new name will be. HSBC also intends to accelerate investments in Asia and this could fuel concerns it will eventually exit the UK and shift its headquarters to this continent.
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