HSBC terminated 193 employees in India, but was quick to point out that 163 people are less than one percent of the total HSBC workforce in India. In addition to those terminated, 620 people have been redeployed in suitable positions in the bank and other group entities in India. The economic downturn was to blame. HSBC is restructuring its consumer assets business division. HSBC claims earnings from developing nations offset losses elsewhere, but as Asia suffers we question HSBC’s dividend.
Dresdner Kleinwort sparked the concern in a note to clients, arguing that, with a global recession now almost certain, some of HSBC’s Asian enterprises might suffer “very substantially”, hitting earnings by an average of 35 per cent. Until HSBC gets the United States and the United Kingdom under control the bank cannot afford a slowdown in other parts of the world. “We expect a similar adjustment in the dividend,” the broker said. “Hence we now expect the dividend to fall by 39 per cent between 2007 and 2009, to 74 cents in 2008 and 55 cents in 2009.”
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