HSBC cuts jobs amid fall in profits

British bank announces decision to cut more than 6,000 jobs in the US.

    HSBC has so far not asked for financial aid 
    from the British government [AFP]

     

    "This capital raising will enhance our ability to deal with the impact of an uncertain economic environment and to respond to unforeseen events," he said in the earnings report.

    The bank reported an adjusted pretax profit of $19.9bn, down 18 per cent versus 2007, but said that profit had slumped 62 per cent to $9.3bn from $24.2bn a year earlier.

    'Doing well'

    The bank said it would close the majority of its US consumer loans business network, cutting about 6,100 jobs.

    Is said its retail bank branch business in the US would not be affected by the move.

    Dariusz Kowalczyk, the chief investment strategist at SJS Markets in Hong Kong, told Al Jazeera that the US mortgage sector, which the HSBC entered a few years ago, had adversely affected the bank.
     
    "Outside of the US, the bank is still continuing to do fairly well," he said.
     
    "The US government has not done enough to support its housing sector and even the plans announced recently by the new administration have not gone far enough.

    "Therefore any bank that is operating in America, be it HSBC or the local banks there, is going to suffer further as house prices continue to decline," Kowalczyk said.

    Douglas Flint, the bank's finance director, said the bank may want to finance acquisitions as weaker rivals retreat from international markets.

     "We want to position ourselves both defensively for turbulent times and opportunistically for the options that will appear," he said. 

    HSBC, which traditionally has been one of the best-capitalised banks in the world, has not asked for financial aid from the British government.

    SOURCE: Al Jazeera and agencies


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