HSBC boosted staff numbers in Hong Kong last year even while they were being cut back elsewhere, as the bank responded to shareholder pressure for more investment in its profitable Asian business.
The company’s annual report shows that HSBC had 229,000 full-time and part-time employees as of December 31, 2017, down from 241,000 in the corresponding period in 2016 — a drop of 5%.
Yet the Hong Kong workforce rose 3% to 30,000, the only location to keep hiring among HSBC’s seven key operating centres. Staff numbers in the United Kingdom, which has the bank’s biggest workforce, fell by 5,000 to 40,000, while India declined by 1,000 to 36,000.
Employee numbers were unchanged in China (24,000) and Mexico (16,000), but they fell by 2,000 in the US to 11,000 and by 1,000 in France to 8,000.
Most retrenched staff worked in HSBC’s under-performing corporate center business, which retained only 1,439 of its 10,940 employees, a drop of 87%. Adjusted profit before tax for corporate center, which includes central treasury and interests in associates and joint ventures, fell by 17% to US$1.7 billion due to lower revenues and higher operating expenses.
Outgoing 2016 chief executive Stuart Gulliver also cut the workforce by almost 9% that year to rein in costs following shareholder pressure for the company to boost its profits. Consequently there was an increased focus on Asian operations, which seems to have paid off.
The pre-tax profit contribution from HSBC’s Asian business amounted to US$15.33 billion in 2017, comprising nearly 90% of the group’s pre-tax profit of US$17.17 billion. Hong Kong contributed the biggest share of Asian operations, with a pre-tax profit of nearly US$9.6 billion. This represented an increase of 19% on 2016.
One area of potential growth in Asia is the Belt and Road initiative, which China has been pushing into emerging markets. The bank said it secured a number of significant new business deals from the initiative last year and has opened China desks in Poland, Luxembourg, Thailand and Macau to develop other opportunities.
HSBC now has 24 China desks, including 20 along Belt and Road routes, that it uses to support Chinese businesses with global expansion ambitions.