HSBC Reports Strong Earnings Yet Cuts Jobs

The London-based bank reported more than $11.5 billion in profits during the first half of the year, an increase of 3 percent, which exceeded analyst expectations. In addition, the bank announced that it would cut another 25,000 jobs globally by the end of 2013. Including the 5,000 job cuts that it already announced earlier this year, HSBC is now slashing 10 percent of its worldwide workforce.

The move is part of a global cost-cutting measure the company announced earlier this year.

HSBC currently employs roughly 296,000 people worldwide, with 110,000 of its staff in Europe and North America. Most of the 30,000 job cuts will come from Europe and North America.

Over the weekend, the bank’s U.S. holding company, HSBC Bank USA, N.A., sold roughly 195 of its 470 U.S. branches to First Niagara Bank, for $1 billion. It is also shuttering another 13 U.S. branches.

“HSBC is committed to the U.S. and leveraging our international network and skill-set, which are our competitive advantages,” said Niall Booker, chief executive officer of HSBC North America, in a statement. “This transaction is part of the strategy outlined in our May 2011 Investor Day presentation to align our U.S. business with our global network and meet the local and international needs of domestic and overseas clients.”

Shedding its retail bank branches in New York is a part of HSBC’s global strategy to focus more on investment and corporate banking, instead of its bread and butter retail consumer banking. The bank also has said in the past that it is looking to invest more in emerging markets such as Central and South America and the Middle East.

HSBC has major U.S. operations in northwestern New York, especially in Buffalo, N.Y. The banking giant got a foothold in the U.S. market in 1980 after acquiring a stake in the Buffalo-based Marine Midland Bank of N.Y., and later obtained full ownership in 1987.

In 1998, HSBC changed its U.S. commercial bank’s brand from Marine Midland to HSBC USA.

First Niagara, which is also based in Buffalo, is paying a 6.67 percent premium over the HSBC branches’ deposits. The company also said that it would retain most of the 1,900 employees it acquired as part of the deal.