Banking giant HSBC said yesterday it would cut US$2.5 billion to US$3.5 billion in costs by 2013 as part of a strategic review, two days after unveiling mixed first-quarter results.
“US$2.5[bn]-3.5bn of sustainable cost saves [are] targeted over the next three years,” HSBC said in a strategy update that was published ahead of an investor day in central London.
The cost-cutting measures will include streamlining IT operations and simplifying the group’s organization, but no figures were given for the number of job cuts.
“We have launched a programme to target US$2.5[bn]-3.5bn of cost saves to reach our cost efficiency ratio target of 48-52 percent,” HSBC chief executive Stuart Gulliver said in the statement.
“This is not about shrinking the business but about creating capacity to re-invest in growth markets and to provide a buffer against regulatory and inflationary headwinds,” he said.
“I and my experienced management team are committed to achieving these operating and financial targets and are wholly accountable for their delivery,” he added.
HSBC had announced on Monday that net profits surged 58 percent to US$4.15 billion in the first quarter on lower taxes and bad debts.
However, at the same time, Europe’s biggest bank also revealed that its pretax gains were pushed down by rising staff costs and by money set aside to compensate customers in Britain who were mis-sold credit insurance.
The group headquartered in London said that profit after tax for the three months to March 31 rocketed to US$4.153 billion from US$2.631 billion in the first quarter of last year.
Adjusted pretax profit fell eight percent to US$5.5 billion, which was below analyst expectations for underlying earnings of about US$6 billion according to a survey by Dow Jones Newswires.