HSBC says cost cuts on track

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HSBC says cost cuts on track

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HSBC has doubled the annual revenue boost it expects from its turnaround plan to the equivalent of 1.57 billion euros.

Having already sold 28 businesses and got rid of fifteen thousand workers, Europe’s biggest bank said it is looking at additional cuts to deal with the costs of new regulations brought in following the financial crisis.

It will also focus more on its fast-growing Asian markets.

Chief Executive Stuart Gulliver said on Thursday that, one year into a three-year recovery plan, HSBC was on target to meet profitability and cost savings targets.

Gulliver said his biggest external worry “is absolutely how the eurozone plays out and whether Greece stays in, whether firewalls are high enough to protect Spain and, frankly, whether markets take things into their own hands before June 17,” when Greece holds new elections.

“Investors have been sceptical about our ability to get our hands around HSBC. The scepticism was about anybody’s ability to move such a large firm and change its direction,” Gulliver told reporters before a presentation to analysts.

“At the year one report card we can evidence that on things we can control we are demonstrating significant traction. We are delivering with good momentum given a difficult backdrop.”

Analysts said the update was reassuring, but think it will be a challenge hitting cost targets.

HSBC should come out and be honest about it. In reality, there was a force majeure in Europe blowing up, and they will need more than three years to meet their targets,” said Mizuho Securities analyst Jim Antos in Hong Kong.