LONDON — HSBC Holdings Plc will impose a hiring and pay freeze this year as part of its drive to cut as much as US$5 billion (S$7 billion) in costs by the end of 2017.

The actions were outlined in a memorandum received by employees on Friday, Ms Gillian James, a spokeswoman for the bank, said yesterday (Jan 31) said in an e-mail statement. The moves were reported earlier by Reuters.

“This is in line with HSBC’s moves to lower operating costs,” said Mr Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities. “HSBC can’t escape from the global economic slowdown and worsening asset quality like other global banks.”

HSBC Chief Executive Officer Stuart Gulliver in June outlined a three-year plan to pare back a sprawling global network by shutting money-losing businesses and eliminating jobs as he pushes to improve earnings amid surging compliance costs. Other major European lenders from Credit Suisse Group AG to Deutsche Bank AG are cutting thousands of jobs as they battle to adapt to tougher regulatory demands on capital.

“As flagged in our Investor Update we have targeted significant cost reductions by the end of 2017,” James, the HSBC spokeswoman, said.

Shares of the lender, which announces annual results on Feb 22, rose 0.4 per cent Hong Kong on today as of 10.29am local time, compared with the benchmark Hang Seng Index’s 0.2 per cent decline. The stock has fallen 12 per cent this year.

Under its three-year plan, the London-based lender is seeking to reduce the number of full-time employees by 22,000 to 25,000, or about 10 per cent. The bank is aiming for reductions of US$4.5 billion to US$5 billion and is seeking a buyer for its Turkey business after selling operations in Brazil.

As part of its focus on more profitable markets, HSBC is reviewing its operations in Lebanon and may exit the Middle Eastern country, people with knowledge of the matter said earlier this month. The bank is closing its Indian private-banking business, people familiar with that move said in November.

HSBC, which is reviewing the location of its headquarters, will also provide an update on whether it will move its base to Asia on Feb 22. The lender is likely to stay based in London due to the vast logistics of relocating, Mr Martin Gilbert, chief executive officer of Aberdeen Asset Management Plc, told Bloomberg Television in January. Aberdeen is one of the British bank’s biggest shareholders. BLOOMBERG