LONDON – After two years of far-reaching cost cuts and asset sales, HSBC said on Wednesday that it planned to find an additional $2 billion to $3 billion in cost savings by 2016 that would include eliminating as many as 14,000 jobs.þ þIn a meeting with investors on HSBC’s strategy, the management team said it aimed to increase dividends and was considering share buybacks. A buyback would be a first among Europe’s largest financial institutions, which until now have focused mainly on increasing capital reserves to comply with stricter regulation.þ þSome investors welcomed the additional cost savings, but HSBC’s shares fell 0.3 percent in London on Wednesday after the bank abandoned a target to bring costs related to income down to 48 to 52 percent. It is now aiming for a cost-income ratio of about 55 percent by 2016.þþStuart T. Gulliver, the chief executive, had warned previously that the difficult economic environment in Europe and slower-than-expected growth in China had hurt the bank’s income. While HSBC stuck to its cost savings plan, the global economy thwarted the bank’s efforts to generate the income needed to achieve its target.þ þOn Wednesday, Mr. Gulliver told investors the bank would “continue to exert tight cost discipline while streamlining processes and procedures.” þþ“Taken together,” he added, “we are confident that these measures will deliver consistent and superior financial results and move us closer to achieving our ambition of being the world’s leading international bank.”þ þHSBC said it expected to achieve additional cost savings by simplifying some of its internal processes and aligning internal systems. The total number of jobs could fall to as low as 240,000 by 2016 from 254,000 once all planned business sales are completed in the coming months.þ þHSBC has sold or exited 52 businesses since 2011 and reduced costs by $4 billion. In recent months, it sold its unit in Panama to Bancolombia for $2.1 billion and its stake in the Chinese insurer Ping An for $9.4 billion. Last month, HSBC said it would eliminate about 1,150 jobs at branches in Britain, adding to the reduction of 30,000 positions announced two years ago.þ þOver the next three years, HSBC plans to focus on commercial banking in Asia and Latin America, relying on the bank’s Hong Kong roots. It also aims to gain market share in wealth management in developing markets, it said.þ þHSBC last week said its first-quarter profit rose almost 50 percent, to $8.43 billion, from the period a year earlier, outpacing analysts’ expectations.þ
Source: NY Times
