AIB Home (IRE)   AIB Economics   AIB Home (GB) 

Tuesday 26th May 2015 
email to a colleague

printer version
Product Description Product Description

Product Description
Cash Management Cash Management

Cash Mgt Services
Public/Private Sectors
2013 Historic Rates 2013 Historic Rates

Historic Average
FX Rates 2013
Let us know let us know

send us your feedback
RateSaver RateSaver

online historic fx and
interest rates
fx3 fx3

custom fx rates
directly to your mobile
fxcentre pro fxcentre pro

confirm and view deals
& payments online
HSBC saves $1 billion in year one
Thursday, 17th May 2012 07.55am

HSBC, Europe's biggest bank, said it cut costs by $2 billion after one year of a 3-year turnaround plan, and is on target to meet its return on equity and other financial targets.

The bank is close to already achieving the bottom end of a $2.5-$3.5 billion range of annualised savings by next year, as set out by CEO Stuart Gulliver, who is steering HSBC back to its roots as a financier of global trade.

HSBC has sold 28 businesses, taking some 15,000 staff off its payroll, and releasing about $55 billion in risk-weighted assets, the bank said in a statement in Hong Kong on Thursday. Having focused on shrinking the bank, analysts and investors expect Gulliver may soon point to where HSBC is expanding.

"We will continue to simplify HSBC, enabling us to integrate systems and operate to high global standards internationally," Gulliver said in the statement. "We will continue to run off our legacy assets, including the U.S. consumer and mortgage lending book."

Separately, HSBC Chairman Douglas Flint said the board was "very satisfied" with progress made on the strategy, but added that return on equity (RoE) and cost efficiency metrics lag the stated targets a year after it was launched.

Gulliver, a 32-year HSBC veteran who took over the top job from Michael Geoghegan, set out to get RoE - a key measure of profitability - above 12 percent, and make sustainable cost savings of up to $3.5 billion, bringing costs below 52 percent of group annual revenue.

The bank was behind those targets at the end of March, with RoE at 6.4 percent and costs at 64 percent of revenue.

"I think HSBC should come out and be honest about it," said Jim Antos, an analyst at Mizuho Securities in Hong Kong. "In reality, there was a force majeure in Europe blowing up, and they will need more than 3 years to meet their targets." HSBC also said the integration of its four businesses - retail banking and wealth management, commercial banking, global banking and markets, and private banking - would deliver incremental revenue of $1.5 billion in the short to medium term. Last year, it brought in an additional $500 million, the bank said. HSBC embarked on almost 30 deals in the last year to move out of businesses that lack scale, don't make money or don't connect with other areas. There have been big U.S. sales, and smaller moves in Europe, including closures in Poland, Georgia and Slovakia. ( C) Reuters

More breaking news >
The above information has been taken from sources we believe to be reliable and trustworthy. However the accurateness and completeness thereof are not guaranteed and therefore should not be relied upon as such. AIB does not endorse or approve the content of any information from third party sites nor will it have any liability in connection with any third party site (including but not limited to liability arising out of any allegation that the content of or information on any third party site infringes any law or the rights of any person or entity)
  © Allied Irish Banks, p.l.c. 2003 AIB Customer Treasury Services is a registered business name of Allied Irish Banks, p.l.c.
Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland. Registered Office: Bankcentre, Ballsbridge, Dublin 4.
Registered in Ireland : Registered No. 024173.