Overhaul as HSBC spends big on technology

HSBC will “simplify” the business, invest billions in tech and turn around its US division as part of new chief executive John Flint’s growth plans.

The bank released a strategy update, setting fresh financial targets that include keeping dividends at current levels and launching share buybacks.

Mr Flint said: “After a period of restructuring, it is now time for HSBC to get back into growth mode.

“The existing strategy is working and provides a strong platform for future profitable growth.

“In the next phase of our strategy we will accelerate growth in areas of strength, in particular in Asia and from our international network.”

An eight-point plan shows the lender will look to boost growth across its Asia business, complete the ring-fencing of its UK bank, boost its share of the mortgage market and improve customer service. It also aims to complete the turnaround of its US business and gain market share internationally.

Mr Flint said HSBC will also be investing £11.2 billion to £12.7bn “primarily in growth and technology”.

Those plans are meant to help HSBC deliver a return on tangible equity – an industry measure of net profit – of more than 11% by the end 2020. Meantime, HSBC expects mid-single-digit growth in revenue between 2018 and 2020 and is likely to see low- to mid-single-digit growth in operating expenses.

HSBC shares were down nearly 1% following the update

HSBC is Europe’s biggest bank, but earns most of its profits from Asia.

Last year, it completed a corporate overhaul to raise profitability by focusing more on high-growth Asian emerging markets while shedding businesses and workers in other countries.