Banking group HSBC announced plans yesterday to cut up to 3,500 jobs as part of a shake-up of its UK banking operations.

HSBC said it would "remove or redeploy" about 3,500 posts, mainly at its head office or in regional management.

The bank added, however, that it was proposing to create up to 1,000 jobs at its branches.

HSBC said the changes were intended to cut bureaucracy, streamline costs and "refocus the retail bank on changing customer needs".

HSBC said redeployment and natural staff turnover would account for a "significant" part of the changes, which will take place during the next 24 months.

The bank said it aimed to remove some 800 administrative, back office roles at a branch level, but added that there would be no overall reduction in staff dealing with customers.

HSBC said the changes were designed to improve the productivity of the group's UK banking operations, which represent a quarter of the group's profits but 33% of its costs.

The UK bank also accounts for 25% of the group's staff, but 30% of its salary bill.

It said costs in the UK were rising almost as fast as revenues.

Between 2001 and 2003, income increased by 9.8% while costs rose 8.4%.

HSBC chief executive Michael Geoghegan said: "We must make decisions now, however difficult, to manage for the future.

"We also fully understand that these changes will create uncertainty for staff in the areas affected.

"They have my personal commitment that we will manage this process carefully and sensitively."

Friday June 18, 2004