LONDON (AP) — HSBC Holdings, Europe's largest bank by market value, will cut up to 25,000 jobs globally to reduce costs and shift its center of gravity further toward the fast-growing Asian economies where it started out 150 years ago.
The London-based group, which is worth 120 billion pounds ($184 billion), about the same as U.S. giant Bank of America, said Tuesday it is "redeploying resources to capture expected future growth opportunities."
Though it has not yet decided whether to move its headquarters, the bank is clear on where it thinks its commercial future lies — China and the Asia-Pacific region.
The bank has suffered a series of regulatory fines and crackdowns in Europe and the U.S. and now wants to capitalize on Asia's rapidly expanding class of newly wealthy. It intends to grow its asset management and insurance businesses, for example, in China's rich manufacturing heartland in Guangdong province and in South Asia, where economies like Indonesia are booming.
Many Western banks have sought to bolster operations in Asia, but HSBC has the advantage of already having a major presence there. Around 75 percent of its 2014 profits were generated in the region, even though it only has about a third of its staff there and its assets are dwarfed by those it controls in Europe.
HSBC has historic ties to the region. It was founded in Hong Kong in 1865 when the city was a British colony in order to finance growing trade between China and Europe, much of it involving opium. Its original name says it all: The Hongkong and Shanghai Banking Corporation.
The company only became London-based in 1992 to meet the regulatory requirements of its acquisition of Midland Bank at the time.
"The world is increasingly connected, with Asia expected to show high growth and become the center of global trade over the next decade," said Stuart Gulliver, HSBC's chief executive. "We recognize that the world has changed and we need to change with it."
HSBC, which has operations in over 70 countries and around 51 million customers, aims to cut costs by $4.5 billion to $5.0 billion by the end of 2017 and reduce the number of full-time employees by around 10 percent, or between 22,000 and 25,000.
It intends to sell its operations in Turkey and Brazil, reducing its workforce by another 25,000. HSBC said it plans to maintain a presence in Brazil to serve large corporate clients.
About 8,000 of HSBC's 48,000 workforce in Britain will lose their job, with a number of branches earmarked for closure. The bank, which is also to rename its remaining U.K. branch network, hopes many of the job cuts globally will come from attrition.
A top union official in Britain said the cuts were the latest example of a workforce being punished for the misconduct of senior management. HSBC has paid billions in fines globally to settle investigations of market rigging and allegations it helped clients evade taxes and launder money.
"Front-line staff have suffered time and time again as they are forced to pay for the mistakes of others with their jobs, their terms and conditions and their reputation," said Dominic Hook of Unite union.
A further concern for British staff is the possibility that the bank will move its headquarters out of London. HSBC said it will make a decision this year.
The bank has already warned about the economic risks facing Britain if the country opts to leave the European Union in a referendum that is due by the end of 2017. It's also complained about the cost of a levy that the British government puts on banks — HSBC is set to pay around $1.5 billion this year alone on that.
HSBC's announcement comes a day ahead of a major speech from British economy minister, George Osborne, who many think is considering pulling back the bank levy.
"We think the financial logic for HSBC to escape the clutches of the U.K. — and Europe — is overwhelming," said Ian Gordon, an analyst at Investec. "What possible reason is there to stay?"
HSBC also said Tuesday it wants to return to profitability its global banking and markets division, which have been hit by tougher regulations since the financial crisis. In 2014, HSBC saw its post-tax profit fall to $14.7 billion from $17.8 billion the year before, largely because of fines and settlements with regulators.
Shares in HSBC closed down 0.9 percent at 614 pence in a weaker market in London.
Kelvin Chan in Hong Kong contributed to this report.