More than 300 HSBC staff face axe in Mideast, Africa

International bank says up to 3% of its 12,000-strong workforce in region set to lose their jobs
More than 300 HSBC staff face axe in Mideast, Africa
HSBC is planning to lay off up to three percent of its 12,000-strong workforce in the Middle East and North Africa as it seeks to cut costs. (Getty Images)
By Andy Sambidge
Tue 26 Apr 2011 09:27 PM

HSBC said on Tuesday it planned to lay off up to three percent of its 12,000-strong workforce in the Middle East and North Africa as it seeks to cut costs.

"As part of a standard operational review of the business to ensure our competitiveness, we have identified an opportunity to improve efficiency through a small reduction of headcount," HSBC said in comments published by newswire Zawya Dow Jones.

HSBC, one of the largest and oldest international banks in the region, said the layoffs would mostly take place in the bank's corporate and retail banking business.

The development comes within days of the bank's announcement that it would close its Russian retail banking operations.

New HSBC CEO Stuart Gulliver is to outline the bank's strategic priorities in a presentation on May 11 that is expected to include outright withdrawals from some countries and business lines, the newswire added.

A report by the Boston Consulting Group on Tuesday said banks in the Gulf Arab region were unlikely to witness the high growth levels seen before the financial crisis.

Middle East banks saw rapid growth rates between 2005 and 2008 but were severely hurt during the financial crisis and were forced to curb lending and set aside more money to meet loan losses due to some high-profile corporate defaults.

"Since 2008, the time of very strong growth is over in the region and ... returning to pre-crisis development in the foreseeable future is unlikely," Reinhold Leichtfuss, senior partner & managing director in BCG's Dubai office said in the report.

BCG's survey of 35 banks in the Middle East showed that banking revenues stagnated in the region during 2010, while profits increased significantly due to lower loan provisions, which despite a 17 percent drop still stood at $8bn.

Recent political turmoil across much of Middle East and North Africa has also affected the region's investment climate.

HSBC posted a profit of $892 million for its Middle East and North Africa operations in 2010, up from $455 million in 2009. The region's contribution to the overall group accounts for around five percent.

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