HSBC Bank

An $11.7 billion pre-tax profit wasn't enough for global banking giant HSBC. Even though it survived the financial crisis and posted decent numbers, the bank has decided to eliminate 10 percent of its 296,000 working force to improve profitability and restructure its operations.On Monday,  Europe's largest bank announced it will slash 30,000 jobs globally through 2013 to curtail surging salary costs. These large-scale cuts  are expected to reduce expenses by around $3.5 billion in the next two years. However, most of these job cuts will be in developed economies like Europe and the US, while  Asia which contributed around 60 percent of the bank's pre-tax profits, will continue to be a growth driver. The bank is planning on recruiting at least 15,000 people in Latin America and Asia.[caption id="attachment_52502" align="alignleft" width="380" caption="Reuters"][/caption]HSBC reported net earnings of $9.76 billion, or $0.50 per share in the first quarter of 2011. Net profit was up 34.7 percent from the year-ago period where as profits before tax grew 3 percent year-over-year. As part of its restructuring exercise the bank will scale back some of its operations in the US, UK, France and the Middle East, while increasing its focus on emerging economies.In addition to the job cuts, the bank is selling 195 of its branches to First Niagara Financial Group Inc (FNFG) for about $1 billion and also plans to shut down 13 branches in Connecticut and New Jersey by next year. HSBC also intends to sell its US credit card portfolio, which has more than $30 billion in assets, a move which would free up capital. In May, it had earmarked leaving 39 countries but has so far only closed in Russia and Poland.Since HSBC's roots in Hong Kong date back to 1865, its private-banking business got an early head start to tap the massive wealth creation in Asia's fast-growing markets as compared to its peers Standard Chartered and Citibank.Globally, banks are trying to come to terms  with stringent regulatory reform when global economic recovery seems uncertain. Moreover,  sovereign debt worries in the US and Europe are also taking a toll on income and profitability.Hence, even though HSBC has a cost problem, its presence in fast growing Asian markets makes it well poised for growth. Background• According to Forbes magazine, HSBC Bank is the world's second-largest banking and financial services group with 7500 offices in 87 countries.• HSBC  ( Hongkong and Shanghai Banking Corporation) is listed on the London and the Hong Kong stock exchanges and prints most of Hong Kong's local currency in its own name• HSBC Group operates as a number of local banks around the world, which explains its advertising tagline "The World's Local Bank." However, it has now decided to close operations in more than 20 countries.• With around 210,000 shareholders and 128 million customers worldwide, HSBC has the maximum international presence among the global multinational banking giants.• Having sponsored the Jaguar Racing Formula One team since the days of Stewart Grand Prix, HSBC ended its relationship with the sport when Red Bull purchased Jaguar Racing from Ford.