HSBC will cut its workforce by 14 per cent by accepting the voluntary retirement of 130 employees.

This voluntary retirement scheme will cost the bank a one-off charge of €14.7 million and is expected to lead to a reduction in operating costs of around €4.4 million a year.

HSBC has a workforce of 900. The full-year results for 2015 are not yet out, but in 2014 the bank’s annual wage bill stood at €51.7 million.

Last November the bank had unveiled an early retirement scheme in a bid to cut costs. The measure was one of several others the bank said it would take to increase productivity. It is understood the bank received hundreds of applications.

In a statement released on the Malta Stock Exchange, HSBC said that following a comprehensive review, it intended to accept around 130 applications.

HSBC said the entire cost for the voluntary retirements will be accounted for in the financial year that ended on December 31, 2015.

“This is expected to result in a one-time reduction in the bank’s profitability for that financial year [2015]. However, the cost reductions are expected to enable the bank to achieve a higher level of profitability and efficiency in future years,” the statement added.

There has been talk of HSBC wanting to pull out of Malta but in its latest statement the bank said it was confident in its ability to grow its Malta business.

The reductions are expected to enable the bank to achieve a higher level of profitability and efficiency

In the first six months of last year HSBC registered a pre-tax profit of €36 million, a decline of €4 million over the same period the previous year. It remains a dominant player in the banking sector alongside Bank of Valletta.

Internationally, HSBC Group wants to cut 50,000 staff across the world in a global shake-up announced last year.

Interviewed by The Business Observer last December, HSBC Malta CEO Andrew Beane said the early retirement scheme was about “reducing costs, not people”.

Acknowledging that there was a link between the two factors, he insisted the bank did not have a pre-set target, denying rumours the bank wanted to cut its workforce by 400.

kurt.sansone@timesofmalta.com