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| HSBC plans up to £2bn in savings as it cuts retail arm | HSBC plans up to £2bn in savings as it cuts retail arm |
| (17 days later) | |
| HSBC, Europe's biggest bank, wants to save up to $3.5bn (£2bn; 2.4bn euros) by cutting the scale of its wealth management and retail divisions. | HSBC, Europe's biggest bank, wants to save up to $3.5bn (£2bn; 2.4bn euros) by cutting the scale of its wealth management and retail divisions. |
| The bank is also streamlining IT operations and the operational structure, though no figures were given for the number of job cuts. | The bank is also streamlining IT operations and the operational structure, though no figures were given for the number of job cuts. |
| HSBC disclosed the plans on Wednesday ahead of a meeting with key investors. | HSBC disclosed the plans on Wednesday ahead of a meeting with key investors. |
| The bank's problems were revealed on Monday after a big rise in costs held back profits. | The bank's problems were revealed on Monday after a big rise in costs held back profits. |
| The proportion of revenue spent on operational costs was 61% in the first quarter, and HSBC said it wanted to reduce this to 48%-52% by 2013. | The proportion of revenue spent on operational costs was 61% in the first quarter, and HSBC said it wanted to reduce this to 48%-52% by 2013. |
| 'Renewed focus' | 'Renewed focus' |
| HSBC said in a statement that it would now focus its wealth management business on 18 key economies, and limit retail banking to markets where it can achieve profitable scale. | HSBC said in a statement that it would now focus its wealth management business on 18 key economies, and limit retail banking to markets where it can achieve profitable scale. |
| The bank said it would be directing investment into fast-growing national economies including Mexico and Turkey, and to certain wider regions, such as Asia and the Middle East. | The bank said it would be directing investment into fast-growing national economies including Mexico and Turkey, and to certain wider regions, such as Asia and the Middle East. |
| One country from which it said it would be withdrawing its retail banking operations is Russia. | One country from which it said it would be withdrawing its retail banking operations is Russia. |
| HSBC is also reviewing its credit card business in the US, which analysts at Barclays capital have said could be worth $25bn if sold. HSBC is also reviewing its US branch network. | |
| Stuart Gulliver, HSBC chief executive, said: "We clearly have a cost problem," adding that the bank was facing "important challenges" and it would "dispose" of some business units. | |
| "Our strategy is to be the leading international bank, concentrating on commercial and wholesale banking in globally connected markets," he added. | "Our strategy is to be the leading international bank, concentrating on commercial and wholesale banking in globally connected markets," he added. |
| "This is not about shrinking the business but about creating capacity to re-invest in growth markets." | "This is not about shrinking the business but about creating capacity to re-invest in growth markets." |
| Negative reaction | Negative reaction |
| The markets seemed unimpressed with HSBC's announcement. Shares in the firm were down 0.8% or 5.1 pence at 651.10p in morning trading in London. | The markets seemed unimpressed with HSBC's announcement. Shares in the firm were down 0.8% or 5.1 pence at 651.10p in morning trading in London. |
| Banking analyst John Smith of wealth management firm Brown Shipley said: "Half of the statement stated things they should be doing anyway". | Banking analyst John Smith of wealth management firm Brown Shipley said: "Half of the statement stated things they should be doing anyway". |
| This view was echoed by Simon Maughan of MF Global, who said: "What is radical for HSBC is just not that radical for outsiders looking in." | This view was echoed by Simon Maughan of MF Global, who said: "What is radical for HSBC is just not that radical for outsiders looking in." |
| The bank currently operates in 87 markets and employs more than 287,000 people. It has 95 million customers. | The bank currently operates in 87 markets and employs more than 287,000 people. It has 95 million customers. |