HSBC to reduce 50k jobs globally

MUMBAI: HSBC's decision to reduce group headcount by 50,000 — nearly 20% of its global workforce — could have implications for India, considering that some of the cuts will come from consolidation of IT and back office operations.HSBC is one of the largest multinational employers in the financial sector with 32,000 jobs in India out of its 2.66 lakh workforce. 

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Sources in the bank said half of job cuts would come from Brazil and Turkey where the bank will be exiting operations which employ around 25,000. Another 8,000 jobs are set to be cut in UK — where the bank will rebrand itself to ring-fence domestic operations from international balance sheet to conserve capital. The bank chief executive Stuart Gulliver has said that he is keeping an eye on efforts to turn around the bank's operations in US and Mexico. Gulliver has also said that it would be growing its operations in China's Pearl River Delta and in Southeast Asia. 

The bank has remained non-committal about its India operations where the regulator is nudging large multinational lenders to form domestic subsidiaries. 
This is the second round of job cuts by HSBC in recent years. In 2011 the company had announced the decision to cut 30,000 jobs. The rationalization took place over a year and several of the downsizing happened by filling in vacancies created by attrition through redeployment of staff. The bank aims to cut costs by $4.5 billion to $5 billion by 2017-end. 

A statement issued by the bank said its focus would be to capture value from the bank's global presence in a changed world. "HSBC's international network covers 90% of global trade and capital flows, providing access to the world's highest growth markets. HSBC's client revenues linked to its international business contributed approximately 40% of the group's client revenues for the year ended 31 December 2014". 

"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. We recognise that the world has changed and we need to change with it," said Gulliver. 

Source - TOI

Swiss prosecutor drops money laundering probe at HSBC, bank to shell out $43 million

Swiss authorities have closed an investigation into allegations that HSBC's Geneva branch helped clients for money laundering after the bank paid $43 million for organisational weakness.

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Indian officials are reviewing the development, but denied any major impact on domestic legal proceedings.

"We ended the procedure following a deal with the bank, which will pay 40 millionSwiss francs ($43 million, 38 million euros)," Olivier Jornot, attorney general in the Swiss canton of Geneva, told reporters.HSBC's Swiss private bank is being accused for suspected to have secret accounts of wealthy customers who had evaded tax in India and elsewhere. Indian tax officials have finalised the tax assessment of 628 HSBC cases. As per Indian tax authorities, more than Rs 6,000 crore is allegedly stashed in HSBC.

Six Indians figure among scores of foreign nationals with Swiss bank accounts, whose names have been made public by Swiss authority in its official gazette for being probed in their respective countries.

Legal experts said Swiss laws are weak, which is why the Swiss prosecutor has not been able to press any criminal charges. HSBC has not accepted any wrongdoing in this case.

Four month ago, Swiss authorities had raided various locations of HSBC private bank offices in Geneva and started a major investigation on money laundering charges and suspected tax-dodging scheme which allegedly helped rich customers launder money.

In a statement, the Geneva prosecutor's office said the bank had "rapidly agreed to begin paying an amount aimed at repairing the illegal acts committed in the past."

Geneva authorities opened the probe in February as the so-called Swissleaks scandal exploded following the publication of secret documents claiming the bank assisted many wealthy clients in thwarting the taxman.
The agreed 40-million-franc compensation would mark the largest amount ever paid in Geneva, Jornot said.

Geneva lead prosecutor Yves Bertossa meanwhile explained that "it is difficult to prove acts of money laundering. That is why we preferred to go with a negotiated solution."

HSBC hailed the agreement, saying "the investigation found that neither the bank nor its employees are suspected of any current criminal offences."

"The bank has fully cooperated with the investigation throughout and will not face criminal charges," it said in a statement.

The bank insisted that it had in recent years "undergone a radical transformation," and had "implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money."

Bertossa said no current employees at the HSBC Geneva offices would face prosecution, but did not rule out future probes of former employees.

The Swissleaks affair erupted in February following investigations by international newspapers -- led by Le Monde of France -- using stolen documents supplied by former HSBC IT employee Herve Falciani.

That data indicated the bank helped over 120,000 clients to hide 180.6 billion euros from tax authorities.

Those revelations came among growing evidence that pledges by banks to halt illicit or irresponsible activities that led up to the 2008 financial crisis have not been fulfilled.

In February the British bank acknowledged that "we sometimes failed to live up to the standards the societies we serve rightly expected from us."

Source - DNA 

HSBC says India's services sector activity contracts for first time in 13 months

India's services sector activity contracted for the first time in 13 months in May, largely due to decline in new order flows amid competitive pressure and natural disasters, an HSBC survey said today.

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The HSBC India Services Business Activity Index, which tracks changes in activity at service companies, fell to 49.6 in May, from 52.4 in April since output prices in the private sector rose further, with the rate of inflation strongest in 13 months.

The index went below the crucial 50 mark, which separates growth from contraction, for the first time in 13 months.Competitive pressure and natural disasters also led to the decrease in new business inflows, which declined for the first time since April 2014, HSBC said.

"Restrained demand accompanied by sweltering heat and the earthquake led to falling new work. Nonetheless, the sector is expected to see a rebound in coming months as these factors fade away," Markit Economist Pollyanna De Lima said.

Meanwhile, the seasonally-adjusted HSBC India Composite PMI Output Index -- which maps both manufacturing and services sectors -- fell to a 7-month low of 51.2 in May, from 52.5 in April.

"Disappointing May PMI data for India services indicated that the sector fell back into contraction after experiencing growth for six successive months," De Lima said.HSBC, however, noted that the prospects for the private sector output may perk up, going forward.

"An upturn in employment combined with improved business confidence further add to the evidence that prospects may brighten," Lima added.

Service providers' optimism was maintained in May as improved marketing strategies and better economic conditions are expected to lead to better business activity over the next one year.

Undeterred by weaker demand, Indian services companies hired additional workers in May. However, the job creation was only fractional as the vast majority of survey participants signalled unchanged levels of staffing.

Source - Times Of India

HSBC downgrades Indian equities to 'underweight'

MUMBAI: HSBC downgraded Indian stocks to "underweight" from "overweight", citing slowing earnings growth, little room for rate cuts and potential negative impact from an unusual weather due to El Nino. 

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India remains one of the most over-owned market in Asia and the bank says the potential for more equity outflows has increased because foreign positions look stretched. 

Overseas investors have sold nearly $2.2 billion worth of cash shares in the last 16 sessions, excluding Japan's Daiichi Sankyo's block sale of Sun Pharmaceutical Industries shares. 

"Rate cuts beyond 2015...will depend on the government's structural reforms. If they are coming, there could be further space to cut. But if not, the RBI may just have to sit tight," wrote analysts Devendra Joshi and Herald van der Linde. 

The investment bank also raised Philippines shares to "overweight" from "neutral" and Hong Kong to "neutral" from "underweight". China and Singapore remain "overweight".

Source - Times Of India