HSBC has announced it will shed up to 50,000 jobs worldwide, with as many as 8,000 going in the UK.
The bank employs about 48,000 staff here, operating just over 1000 branches. Around 12% of branches will be closed, it said in a statement, although no specific figure has been given yet.
HSBC's cost-saving target, which is $4.5bn - $5bn (£2.6bn - £3.3bn) a year by 2017, is not significantly different from the plans it made in 2014. It is exiting businesses in Brazil and Turkey, which is where about half the job losses will happen, with the rest resulting from IT and back office consolidation.
HSBC is still considering whether to move headquarters from its iconic Canary Wharf location to Hong Kong. The bank said it was weighing factors such as economic growth, the tax system, government support for the growth of the banking system, long-term stability and an ability to attract good staff. Management said the HQ review will be done by the end of 2015.
It is tempting to think that after the drubbing HSBC received over the tax affairs of clients at its Swiss private bank, it will not take much to push it over the edge.
Two potentially deciding factors – the ring-fencing of UK banks and the banking levy – are being touted as big topics on the agenda at the Chancellor George Osborne's Bankers and Merchants Dinner speech at Mansion House on 10 June.
The consensus in the city is that the relocation plan will stay on the table unless Osborne announces a sharp reduction in the banking levy in his imminent budget.
In the absence of any political U-turn, what is currently known is that HSBC's 2015 non-tax-deductible bank levy will be $1.5bn - $1.6bn, equivalent to 11%-12% of their 2014 attributable profit. According to analysts, around 60% ($1bn per annum) of HSBC's liability to the levy would "disappear" if it moved to Hong Kong – a compelling reason to leave.
HSBC's chief executive Stuart Gulliver also announced that the new ring-fenced retail bank will not be called HSBC. The bank will consult with customers and staff to decide on a new name.
UK banks are legally obliged to divide their investment banking and retail operations, a measure arrived at in the wake of the banking crash to protect the assets of customers and small businesses. This onerous duty has to be completed by 2019; depending on how it goes, HSBC may decide ultimately to sell its ring-fenced bank.
Sam Bowman, deputy director, of the Adam Smith Institute, told IBTimes UK: "Ring-fencing is a terrible idea. For a start, the financial crisis was caused by investment-only banks [Bear Stearns, Lehman Bros, Merrill Lynch], not banks with both investment and retail arms. So ring-fencing would not have prevented the crisis."
It is possible to argue that banks are more robust the more diverse their operations are. For instance, during the Great Depression, the US's restrictions on interstate banking were very harmful. Banks had all their eggs in one basket and thousands of US banks failed, whereas none of Canada's half-dozen banks, which operated nationally, collapsed.
Since the Conservatives have won the election and regulation is not required as political expediency per se, the City has been hoping for an end to "banker bashing". The situation with HSBC only makes this more acute.
Bowman added: "The HSBC cuts are a sign that we can't take the financial sector for granted; yes, we have friendlier regulations than most, and it's unlikely that the whole City will up sticks and leave, but at the margin the government can have an important impact on investment and jobs in the UK.
"I do hope we stop getting so much banker bashing, mostly because that adds uncertainty to the financial system. Even if Osborne does not intend on imposing more punitive regulations and/or taxes on bankers, there is rhetoric that suggests he might confuse markets and make financial firms less likely to invest in the UK," he said.
Prof Philip Booth, editorial and programme director at the Institute of Economic Affairs, said since the financial crisis productivity performance in the financial sector has been dire, partly because of an avalanche of new regulations.
He told IBTimes UK: "There are two possible responses to this. One is to cut jobs and try to improve efficiency. The other is to cut jobs and stop doing those things that are not contributing to the group's profitability.
"Many people applauded when George Osborne said that he wanted to 'rebalance' the UK economy. Here is the reality – job cuts and a reduction in the contribution of finance to the economy as a whole, including a reduction in business lending."