HSBC, Barclays on a cost-cutting spree

Mumbai: In a departure from roaring growth and profit numbers posted last year, two leading British lenders in the country, HSBC and Barclays, are on a cost-cutting spree, involving some retrenchments as they realign their operations.

While HSBC, which had recorded its best ever profit from its India operations last year, denied reports in a section of the media that it has asked as many as 150 people to pack up, Barclays India admitted that it has asked a few people to leave the organisation as part of its operational recast.

When contacted a Barclays spokesperson told PTI, "we have combined the client relationship teams in Barclays corporate and Barclays capital. As a result, the client servicing team will now report to the investment banking head here.

The move recognises the close alignment between these two businesses as they focus on serving the needs of the country's largest companies, MNCs and financial institutions, Barclays spokesperson said.

Jaideep Khanna will lead Barclays India's corporate and investment banking coverage team from now onwards. As a result of this strategy, there will be a small reduction in the number of corporate coverage and product bankers at Barclays.

The parent Barclays Plc is the second largest lender in Britain with 1.49 trillion pounds in assets, but Barclays India has only nine branches and 40 ATMs. Its total income for last fiscal was Rs 1,808 crore and it employs around 5,000 people in the country.

"However, the people impact is being managed to be kept to the minimum. For those affected by redundancy, they will receive a fair package in context of the market," the spokesperson said, adding "the realignment will be done in a phased manner over the next two months or so."

A Barclays source, who wished to stay anonymous, said that the number of people impacted will be one-third of the coverage or client relations team in the corporate banking business, which works out to be around 25 mid-level executives.

Meanwhile, the country¿s oldest and second largest MNC lender HSBC India, which had posted an a whopping 82 percent jump in its annual profit at Rs 3,070 crore million in 2010-- the largest earnings in its 145-year operational history here is also revamping its operations.

"There is no substance to reports that we have asked our people to leave. As part of our revamp process, we did in fact ask those employees in our loan recovery section to find new jobs within the bank, and not leave the organization. We are only re-deploying a section of our staff," said an HSBC India spokesperson.

Source: Financial Express