HONG KONG • HSBC Holdings will impose a hiring and pay freeze this year as part of its drive to cut as much as US$5 billion (S$7.1 billion) in costs by the end of 2017.
The actions were outlined in a memorandum received by employees last Friday, Ms Gillian James, a spokesman for the bank, said on Sunday in an e-mail statement.
Mr Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities, said: "This is in line with HSBC's moves to lower operating costs. HSBC can't escape from the global economic slowdown and worsening asset quality, like other global banks."
HSBC chief executive officer Stuart Gulliver in June outlined a three-year plan to pare back its global network by shutting money-losing businesses and eliminating jobs as he pushes to improve earnings amid surging compliance costs.
Other major European lenders from Credit Suisse Group to Deutsche Bank are cutting thousands of jobs as they battle to adapt to tougher regulatory demands on capital.
"As flagged in our Investor Update we have targeted significant cost reductions by the end of 2017," bank spokesman Ms James said.
Shares of HSBC, which announces annual results on Feb 22, rose 0.3 per cent in Hong Kong yesterday to end at HK$54.65. The stock has fallen 12 per cent this year.
Under its three-year plan, the London-based lender is seeking to reduce the number of full-time employees by 22,000 to 25,000, or about 10 per cent. The bank is aiming for reductions of US$4.5 billion to US$5 billion and is seeking a buyer for its Turkey business after selling operations in Brazil.
As part of its focus on more profitable markets, HSBC is reviewing its operations in Lebanon and may exit the Middle Eastern country, while it is also closing its Indian private banking business, sources said last year.
HSBC, which is reviewing the location of its headquarters, will also provide an update on whether it will move its base to Asia on Feb 22.
The lender is likely to stay based in London due to the vast logistics of relocating, Mr Martin Gilbert, chief executive officer of Aberdeen Asset Management, told Bloomberg Television last month. Aberdeen is one of the British bank's biggest shareholders.