HSBC sweet-talks investors

HSBC, 'the world's local bank', is turning into ... er ... just a big bank as it executes its strategy of focusing on regions that offer the sexiest growth prospects.

HSBC has issued an update of its huge restructuring. So far Britain's biggest bank has sold or exited 28 businesses since the beginning of 2011, releasing $55bn in risk-weighted assets.

The group has also reaffirmed its target of achieving a cost efficiency ratio of 48-52%, and a common equity tier 1 ratio (which measures the capital adequacy of a bank) of 9.5-10.5%.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Part of this will be achieved by cost savings, which so far have reached $2bn annually.

The main pitch to investors from HSBC is the reorientation towards financial markets operations and away from non-core retail operations. The firm cited in a presentation to major investors pre-tax profits in Hong Kong and the Rest of Asia-Pacific at 15% and Latin America at 29% as exemplars of its emerging markets success.

Stuart Gulliver, the Chief Executive maintained the aim was to create a "simpler, more coherent organisation that is easier to manage and control."

He added: "We will continue to run off our legacy assets, including the US consumer and mortgage lending book. We are restructuring our US operations, repositioning our Global Private Banking offering, and adapting to the challenges posed to Global Banking & Markets products by the changing regulatory environment."

HSBC shares were down 1.8% at 11:13, although that may have less to do with the group's restructuring and rather more to do with the current mayhem in Europe.

BS