Background
Europe’s biggest bank, Hong Kong and Shanghai Banking Corp. (HSBC) plans to save up to $3.5 billion by reducing the scale of its retail and wealth management divisions. It is also in the process of streamlining IT operations. HSBC however did not give particulars about job cuts, if any.
Revised Focus
The revenue spent on operations was about 61% in the first quarter. HSBC is looking for a drastic cut in this expenditure over the next 2 years to the range of 48% to 52%, by the year 2013. It will now concentrate on wealth management in the top 18 economies and retail banking will be limited to regions where profits are sufficiently high.
This means that the focus may shift to emerging economies like Turkey and Mexico, and certain countries in Asia and the Middle East.
US Region
HSBC will also be taking a closer look at its American credit card division which Barclays analysts have valued at $25 billion. The bank will also review the US branch network.
CEO Speaks
The HSBC Chief Executive, Stuart Gulliver admitted that there is a cost problem. He said that there are some important challenges being faced and some business units would be disposed by the bank.
