HSBC targets $3.5 bln cost savings in new strategy

AP News
Posted: May 11, 2011 6:51 AM
HSBC targets $3.5 bln cost savings in new strategy

HSBC said Wednesday it is aiming to trim costs by up to $3.5 billion and to target investment in high-growth economies as part of a new management team's strategy.

In an investor presentation, HSBC said it was looking for sustainable cost savings between $2.5 billion and $3.5 billion within three years.

Chief Executive Stuart Gulliver, who moved into the job at the start of the year, said the bank will be directing investment to faster growing markets and regions, such as Mexico and Turkey, and scaling back elsewhere by, for instance, withdrawing from retail banking in Russia.

Gulliver said the bank saw opportunities to grow its private banking business in Asia, the Middle East and Latin America, and to expand in retail banking in Mexico and Turkey.

In North America, where HSBC is still dealing with the legacy of bad loans which came from the acquisition of Household Finance, the bank plans to build up its New York operation and to target business from small and mid-market companies looking to international markets.

HSBC shares were down 0.6 percent at 652.1 pence in morning trading on the London Stock Exchange.