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 will include the elimination of as many as 14,000 jobs.
In a meeting with its investors to update them on HSBC’s strategy, the management said it also aims to increase dividends and consider share buybacks. A share buyback would be a first among Europe’s top financial institutions, which until now focused mainly on increasing their capital reserves to comply with stricter regulation.
Some investors welcomed the additional cost savings, but HSBC’s shares dipped slightly in London on Wednesday morning, falling 0.3 percent, after the bank abandoned a target to bring costs related to income down to between 48 percent to 52 percent. It is now aiming for a cost-income ratio of about 55 percent by 2016.
Stuart T. Gulliver, the chief executive, had warned previously that the difficult economic environment in Europe and slower-than expected economic growth in China had hurt the bank’s income. While the bank stuck to its cost savings plan, the global economy thwarted HSBC’s efforts to generate the income it needed to achieve its target.
On Wednesday, Mr. Gulliver told investors that the bank “will continue to exert tight cost discipline while streamlining processes and procedures.â€
“Taken together, 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,†he said.
HSBC expects to achieve additional cost savings by simplifying some of its internal processes and aligning internal systems across its operation. 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.
HSBC has sold or exited 52 businesses since 2011 and reduced costs by $4 billion. 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 two years ago.
Over the next three years, HSBC plans to focus its attention 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.
HSBC reported last week that its earnings rose almost 50 percent, to $8.43 billion, more than analysts expected.
