HSBC is starting a new restructuring plan due to a big drop in trading volumes caused by both the eurozone crisis and the American debt stand- off. The plan will result in 10,000 job cuts to start and some analysts believe there will eventually be as many as 30,000 redundancies. Even though HSBC has made profits of £6.6Bn this year, the new plan is said to be part of chief executive Stuart Gulliver’s overhaul of operations.
In comparison, Royal Bank of Scotland and Lloyds TSB have made an estimated combined loss of £4Bn, cut tens of thousands of jobs and been saved from collapse by government money. As a result, there are concerns that the losses combined with the Independent Commission on Banking report looming could ruin government plans to sell stakes in the banks. The billions of taxpayer’s pounds which were poured into the banks to save them from ruin mean that taxpayers own 83% of RBS and 41% of Lloyds TSB. Although both banks have overcome the worst of their problems, compared to last year profits are down. The first half of 2010 showed a £1.3Bn profit for Lloyds and £9 million profit for RBS. The banks will also make known whether they have met their targets for lending as set by the Project Merlin initiative and RBS is expected to not have met these targets for their small business lending.
Barclays profits are expected to have dropped 40% to £2.4 billion this year. It too is under pressure from investors to cut jobs.
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