HSBC to slash 6,100 jobs in US

Europe's largest bank HSBC will be cutting as many as 6,100 jobs in America, as the entity has decided to close down majority of its business network for consumer finance segment.

The job losses come as the bank would cease to write new consumer finance business through the HFC and Beneficial brands in the US.

Household Bank is a trading name of HFC Bank Ltd, which is a member of the HSBC Group.

"... We will close the majority of the HFC and Beneficial-branded US branch network, regrettably with the loss of 6,100 jobs. This will result in a restructuring charge of $265 million in the first half of 2009," HSBC today said in a statement while announcing its annual results.

The firm has reported a pre-tax profit of 9.3 billion dollars for the full year 2008, a decline of 62 per cent as compared to the year-ago period.

HSBC attributed the decision not to write new consumer business, to lack of home equity, the deteriorating outlook for house price appreciation and very limited refinancing opportunities available to this customer segment in the near term.

"... We will cease to write new consumer finance business through the HFC and Beneficial brands in the US, and will concentrate on running-off the outstanding real estate secured and unsecured portfolio of $62 billion," it added.

HSBC noted that the restructuring charge of $265 million would include closure costs and non-cash charges, and annualised cost savings of about $700 million.

"With downside risks for unemployment and residential real estate in the US, we expect credit provisioning to remain elevated and operating losses to continue in 2009 and 2010," the statement said.

For North America, the company reported a loss of $15.5 billion including the goodwill impairment charge of $10.6 billion in Personal Financial Services.