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HSBC to keep hiring in China

08-03-2011 13:48 BJT

SHANGHAI - HSBC Holdings PLC said on Tuesday that it will continue to hire and invest in China, despite plans to cut tens of thousands of employee worldwide.

Europe's biggest bank said on Monday it will eliminate 30,000 jobs by the end of 2013, or about 10 percent of staff, to rein in salary costs, while hiring more people in emerging markets.

Asia-Pacific Chief Executive Officer Peter Wong told reporters in Shanghai that there would not be lay-offs in China, which the bank sees as one of its "high-growth" markets.

"China's a strategically important market, where investments and the number of employees will grow. HSBC won't slim its operations in China," he said.

Wong said HSBC added 5,000 people in Asia in the first half and hiring will continue in China, where he expects "sustained growth".

To free up capital, HSBC announced a plan three month ago to slash costs and sell, shut or streamline retail banking in 39 countries.

On Sunday, the bank agreed to sell 195 branches in the United States to First Niagara Financial Group for about $1 billion in cash, and close another 13 of the 470 sites it had. The bank also plans to sell its US credit-card business, which has more than $30 billion in assets.

Wong said capital raised through these moves would be poured into emerging markets, including China

While HSBC's retail banking in China hasn't been profitable, investment will continue, Wong added, as deposits raised through the business will provide funding for other activities in the country.

The bank said it would actively expand its branch network in China, where it has 108 outlets, 16 rural bank outlets and 38 Hang Seng Bank outlets.

"It's not about if we want more branches, it's about finding the right locations," said Helen Wong, president and chief executive officer of HSBC Bank (China) Ltd.

In the first half, HSBC's China business grew much faster than its global or Asian business. Pre-tax profit in China jumped 38 percent year-on-year to $1.8 billion, compared with a 16 percent increase in Asia and 3 percent rise globally.

China contributed 15 percent to the $11.5 billion in first-half pre-tax profits HSBC reported on Monday.

Excluding profit earned through cooperation with Chinese partners, including Bank of Communication Co Ltd and Ping An Insurance (Group) Co of China Ltd, Wong said first-half pre-tax profit in China grew 170 percent.

China CEO Wong said HSBC would acquire as many licenses as possible from Chinese regulators to expand in the country.

"If there are any new businesses introduced during the development of China's financial markets, we want to be part of it," she said.

The bank is preparing to apply for a license to distribute mutual funds in China, a market that has just been opened to foreign banks.

It also wants to underwrite bonds in the domestic inter-bank market.

Last week, the bank won approval to become a member of the Shanghai Futures Exchange, the first foreign bank in China to be able to trade in the country's gold futures market.

Editor:Yang Jie |Source: China Daily

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