HSBC
has achieved $2 billion in cost savings on an annualised basis, through
a radical restructuring programme, according to its group strategy
investor meeting held in London.

The bank has made substantial cutbacks in Asia, including 3,000 job
losses in Hong Kong and the sale of its Japanese, South Korean and Thai
retail businesses, and they are taking affect. The overhaul helped
profit before tax increase 15 per cent in Hong Kong and the rest of
Asia-Pacific during 2011.

Altogether the London and Hong Kong-listed bank has disposed of or
exited 28 non-core businesses since the beginning of 2011, making HSBC simpler and easier to manage, it said, and potentially releasing $55 billion in risk-weighted assets.

The bank reaffirmed its financial targets to achieve return on common
equity of 12-15 per cent, a cost efficiency ratio of 48-52 per cent,
and a common equity tier 1 ratio of 9.5-10.5 per cent.

As recently reported, the banking giant has agreed to sell businesses
in Colombia, Peru, Uruguay and Paraguay, entering a deal with the
Colombian banking entity controlled by the Gilinski Group, Banco GNB
Sudameris.  HSBC has also said it may sell its wealth and retail banking
operations in Korea to the Korea Development Bank, part of the KDB
Financial Group. The bank continues to offload certain businesses -
include wealth management - to consolidate its global operations.

Integration

Integration of HSBC’s four global businesses delivered incremental
revenue of $500 million in 2011, with a further $1.5 billion anticipated
in the short to medium term

“Since we set out our strategy to make HSBC the leading international bank, we have moved at pace,” said Stuart Gulliver, group chief executive.

“We are reaffirming our targets, and, while market conditions and
changing regulatory costs will continue to influence our performance, we
have clear and robust programmes in hand to manage costs and capture
opportunities for growth.”

The bank will continue to run off its legacy assets, including the US
consumer and mortgage lending book. HSBC is currently restructuring its
US operations, repositioning its global private banking offering, and
trying to integrate its four global businesses more closely.

“We have increased by an additional $1 billion our assessment of the
potential extra revenue achievable from business integration in the
short to medium term. We will commit capital to organic growth
opportunities in priority growth markets,” said Gulliver.