HSBC eyes $3.5bn total savings

The lender scales down target in retail banking and wealth management after disappointing quarterly earnings.

HSBC has narrowed its global ambitions, announcing targeted savings of $2.5bn-$3.5bn over the next two to three years and a probable withdrawal from dozens of high streets worldwide.

Stuart Gulliver, who took over in January as chief executive of Europe’s largest bank by market capitalisation, said on Wednesday that he would scale back in both retail banking and wealth management.

The bank had identified only 22 high street operations and a core of 18 wealth businesses generating sufficient returns out of the 87 markets in which HSBC is active.

“We’ve tried to do everything, everywhere, always,” Mr Gulliver said at an investor conference two days after releasing disappointing quarterly earnings. “We’re not going to do that any more. We don’t necessarily have the ability to be successful everywhere.” He said that HSBC’s famous advertising slogan – “the world’s local bank” – focused on high street branches was now misleading. “Do not mistake our marketing strapline for our strategy,” he said. Executives said the slogan would be “retained and evolved”.

The bank is conducting a “strategic review” of its US credit-card business and branch network, which could lead to a sale, it said. HSBC hopes to reinvent itself as a corporate bank in the US, backing a hoped-for “renaissance in manufacturing” and exports.

Aside from Russian retail banking, Mr Gulliver did not specify which units would close.

HSBC expects to generate $5bn, or 6 per cent, of additional revenues in wealth management, particularly in Asia, and through the benefits of the commercial and investment bank working more closely together.

View the full story in Financial Times.