HSBC announce job losses despite profits

Yesterday, HSBC announced through its wholly owned subsidiary HSBC Bank USA, N.A. and other wholly owned affiliates, has reached agreement to sell 195 retail branches, primarily in Upstate New York, to First Niagara Bank, N.A. ("First Niagara") for a consideration equal to a premium of 6.67% of the deposits to be transferred on closing. Based on 31 May 2011 figures, the consideration would represent approximately US$1.0bn.

Niall Booker, Group Managing Director and Chief Executive Officer of HSBC North America, said:

"We've been proud to serve the Upstate New York community for many years and look forward to continuing our engagement in the region through a strong commercial and corporate banking presence.

"I would like to take this opportunity to thank our branch employees and retail branch customers in the region for their loyalty over the years. Our priority is to make this transfer as seamless for them as possible."

In addition to the sale of the retail branches to First Niagara, HSBC Bank USA has decided to consolidate approximately 13 branches located in Connecticut and New Jersey into nearby HSBC branches by the first quarter of 2012, subject to regulatory approval.

Today, HSBC Holdings PLC released its 2011 Interim Results, revealing profits were up 7% to £6.9bn.

Financial highlights:

-  Reported pre-tax profit US$11.5bn: up 3% on 1H10, and 45% on 2H10

- Profit attributable to ordinary shareholders US$8.9bn: up 35% on 1H10, 46% on 2H10

- Return on average ordinary shareholders’ equity 12.3%: up from 10.4% in 1H10, 8.9% in 2H10

- Earnings per share US$0.51: up 34% on 1H10, and 46% on 2H10

- Net assets per share of US$8.59: up 17% on 1H10, and 8% on 2H10

- Dividends declared in respect of 2011 totalling US$0.18 per ordinary share, up 12.5%

- Loan impairment and other credit risk provisions US$5.3bn: down 30% on 1H10, 19% on 2H10

- Advances-to-deposits ratio 78.7%: up from 77.9% in 1H10, and 78.1% in 2H10

- Core tier 1 capital ratio increased to 10.8% from 10.5% during the period

Business highlights:

- Commercial Banking profits up 31%: supported by revenues up 14% and customer lending up
12% compared to year end

- Retail Banking and Wealth Management profits up 131% as loan impairment charges fell

- Global Banking and Markets profits down 12%, but held up well against strong 1H10

- Profitable in all regions: profits up in Asia, Latin America, the Middle East and North America

- Revenues stable at US$35.7bn: double digit growth in Asia and Latin America

- Customer lending up 8% on year end: led by demand in trade, emerging markets and Europe

- In the US, made progress on strategic review of credit card business and announced disposal of
195 non-strategic branches, principally in upstate New York

- Announced: closure of retail banking in Russia and Poland; disposal of three
insurance businesses

- Cost efficiency ratio of 57.5%: compared with 50.9% in 1H10, and 59.9% in 2H10

Stuart Gulliver, Group Chief Executive said:

“I am pleased with these results, which mark a first step in the right direction on what will be a long journey.”