Hyderabad and Bangalore are expected to be the principal beneficiaries of the world's second-largest bank's decision to relocate processing and call centre jobs to India, Malaysia and China.

The announcement makes HSBC follow similar moves by Bank of America, National Rail Inquiries, BT, Goldman Sachs, Abbey National and Prudential.

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All have been motivated by the desire to cut labour costs by taking advantage of the cheaper job market in India.

At least 4,000 jobs in the United Kingdom will be affected as HSBC expands its existing outlets in Hyderabad and Bangalore and extends the outsourcing bandwagon to  new centres in China and Malaysia.

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The bank's UK operations in Brentwood, Sheffield, Birmingham and Cardiff will be affected as 1,500 jobs are cut in 2004, followed by 2000 in 2005 and 500 in 2006.

The bank's move has been  condemned by finance union Unifi for putting 'profit before people.'

Official Rob O'Neill said: "The gloves are off. Unifi has managed so far to ensure that there have been no compulsory sackings, but the world's local bank has shown that if the job can be done cheaper somewhere else, then they'll move it."

"It's profit before people. We'll fight tooth and nail," he said.

Industrial action would also be considered.

HSBC chief executive Bill Dalton said the job cuts were essential for the bank's continued success.

He added, "As one of the world's largest financial service companies, HSBC has a responsibility to all its stakeholders to remain efficient and competitive. This includes increasing productivity and allocating resources to both developed and emerging markets.

"This is the best, indeed, the only way, of ensuring job security for our staff worldwide.

"The creation of new jobs in developing countries such as China, India and Malaysia is a very positive contribution to their economies."