HSBC to cut jobs in Middle East

HSBC is to cut about 360 jobs from its Middle East and North African workforce as the international banking giant downsizes its operations worldwide and seeks to improve profits.

The cuts - about 3 per cent of its 12,000-strong workforce in the region - are not believed to be targeted at any specific country, although they will affect workers "across the board at all levels" in the bank's retail and corporate operations.

"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," the bank said.

"We are aware that the proposed changes will be difficult for members of staff impacted but will do everything we can to support those affected."

In 2006, HSBC employed 7.700 people in the region.

"With the steady but still volatile recovery of the world economy, it is extremely important to understand the role that the Middle East region plays and to create the right platform from which to grow our business," said Stuart Gulliver, the bank's chief executive, in a recent note.

"With a presence of over 50 years in the region, HSBC benefits from exceptional relationships and a deep understanding of these markets, and we will continue to invest in them."

HSBC recently closed its retail banking operations in Russia after just two years of operations, Reuters reported.

The bank's Middle East unit made a net profit of US$462 million (Dh1.69 billion) last year, up from a loss of $6.7m in 2009, according to its financial statements. During that time, employee remuneration rose 6.2 per cent to $502m.

However, banks operating in the UAE and the wider region are carefully re-evaluating their costs of doing business as competition increases, said Julien Faye, a partner and the head of the financial services practice at Bain & Company Middle East.

"Operational efficiency is becoming critical for all of them," he said. Segments such as retail operations and banking for small and medium businesses were becoming particularly difficult for international banks, Mr Faye said.

"Some are starting to question if they should stay in these sections because the local banks are getting better and better."

ghunter@thenational.ae

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