According to Reuters report, HSBC Holdings plc (NYSE:HBC) (LON:HSBA) indicated that it doesn’t expect Britain to change its bank levy policy before the general election due in 2015. HSBC anticipates that it might have to pay about $800 million on the tax during 2013.
The bank levy is taken as a percentage of a UK bank’s consolidated balance sheet and of a foreign bank’s UK assets. According to HSBC Holdings plc (NYSE:HBC) (LON:HSBA), the levy has unfairly hit banks with big overseas operations. Last year HSBC paid $571 million towards bank levy. However with higher tax rate, this levy is expected to rise to nearly $800 million in 2013.
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HSBC Job Cuts
HSBC Holdings plc (NYSE:HBC) (LON:HSBA) aims to cut an additional 14,000 jobs globally as it plans to save nearly $3 billion in annual costs by 2016.
The new announcement would cut HSBC’s total headcount to between 240,000 and 250,000 over the next three years.
In a strategy update, HSBC’s chief executive Stuart Gulliver warned the bank may struggle to meet its targeted 12 percent to 15 percent return on equity for full-year 2013, as it confronts a weakened global economy squeezing its revenues.
However Stuart Gulliver exuded confidence that the targets would be achievable in the 2014-16 periods as HSBC makes additional investments in high growth markets and commercial banking.
Interestingly Stuart Gulliver has already overseen $4 billion of cost cuts since he assumed office in 2011.
The bank also hopes to achieve additional cost savings by simplifying some of its internal processes and aligning internal systems. Besides over the next three years, HSBC Holdings plc (NYSE:HBC) (LON:HSBA) plans to leverage its Hong Kong roots by focusing on commercial banking in Asia besides enhancing its market share in wealth management in developing countries.
Since 2011, HSBC Holdings plc (NYSE:HBC) (LON:HSBA) has sold or exited 52 businesses. In recent months, it sold its unit in Panama to Bancolombia for $2.1 billion and its stake in the China’s second biggest insurer Ping An for $9.4 billion. Other divestments include its U.S. credit card operations. Last month, HSBC Holdings plc (NYSE:HBC) (LON:HSBA) said it would eliminate about 1,150 jobs at branches in Britain, adding to the reduction of 30,000 positions announced two years ago.
HSBC Holdings plc (NYSE:HBC) (LON:HSBA) has indicated that banks must learn from the experiences of other industries such as auto manufacturers and telecommunications companies that have had to change their business models to adapt to new conditions, underlining the challenges banks are facing globally from tough new regulations designed to avert another financial crisis.