HSBC says 1,200 staff face axe in Britain

LONDON: HSBC said on Wednesday it could axe up to 1,200 workers in Britain as Europe's biggest bank strengthened measures to withstand the global financial crisis.

"There are difficult decisions that have to be made as we adapt to a new environment and ensure we are well positioned for the future," said HSBC managing director Paul Thurston.

"The operating environment for banks in the UK is extremely challenging and will remain so for some time," he added.

HSBC, which employs 58,000 workers in Britain, said the plan to cut two per cent of its workforce there would hit its IT and human resources operations.

"HSBC today announced that 1200 of its UK staff face potential redundancy following an operational review of its business," the bank's statement said.

Following the news, the share price of HSBC shed 3.26 per cent to 378.5 pence on London's FTSE 100 index of leading shares, which slid 1.26 per cent to 3,862.23 points in late morning trade.

Britain's biggest union Unite claimed that HSBC's British workforce would be cut by 2,900 in 2009, but this would also include planned retirements.

Separately on Wednesday, British insurer Legal & General said it will axe 650 jobs in its home market after posting a 2008 net loss.

HSBC is cutting staff and boosting its capital by 12.5 billion pounds (13.6 billion euros, 18.3 billion dollars) to withstand the financial crisis.

The London-based bank outlined its plan for a record British rights issue earlier this month when it reported a 70-per cent plunge in annual net profits.

HSBC, which enjoys solid growth in Asia, had been regarded as one of the more robust global banks as the crisis devastated many top lenders and has refused British government financial help in contrast to some of its rivals.

However its bad debts surged to almost 25 billion dollars last year, mainly as a result of the collapse of the US subprime housing market.

HSBC recently said it was shutting most of its HFC and Beneficial branches in the United States, with the loss of 6,100 jobs. HSBC has meanwhile already shed 1,100 employees -- including 500 in Britain -- at its investment banking division since late 2008.

HSBC was one of the first banks to warn of problems with products linked to the subprime or high-risk US mortgage sector. Last September, it scrapped a six-billion-dollar deal to buy a major South Korean bank after the financial crisis cut asset values worldwide.

Last week, HSBC shareholders overwhelmingly approved the plan to boost the bank's capital by 12.5 billion pounds.

The group is to offer investors five new shares at a heavily-discounted 254 pence each for every 12 they already own.