London, United Kingdom (AHN) – Banking giant HSBC announced Wednesday that it plans to shave costs by up to $3.5 billion with a combination of strategies, including reducing its retail and wealth management divisions as well as trimming IT operations.
HSBC is Europe’s largest bank, but it also has a large presence in other regions, operating in 87 countries with a staff of more than 287,000 people. No estimates of the potential size of staff cuts were given.
The bank revealed problems with spending versus revenue on Monday. Rising operational costs took 61 percent of revenue during the first quarter of the year, which cut into profits.
Bank officials say they want to cut operational costs by 48 to 52 percent by 2013. That equates to a reduction in annual costs of about $2.5 billion to $3.5 billion by 2013. Part of the cost savings will come from moving technology development operations to low-cost countries.
HSBC said it would focus on more profitable markets. That means it will pull out of Russia while directing investment into countries such as Mexico and Turkey and expanding into regions such as the Middle East and Asia.
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