HSBC shares fall in Hong Kong after cost-cut plans

12th May 2011, Comments 0 comments

Shares in HSBC fell in Hong Kong Thursday, a day after the banking giant announced plans to slash costs by up to $3.5 billion by 2013 and said it was considering selling its US branch network.

The heavyweight play shed 1.27 percent to HK$81.80 ($10.53) by midday as the broader Hang Seng Index fell 0.83 percent.

The British lender, which survived the 2008 global financial crisis without state aid unlike many of its rivals, said Wednesday it would seek to save $2.5-3.5 billion in costs within two years.

Its new chief executive Stuart Gulliver said the savings would be ploughed back into fast-growing markets around the world, especially in Asia.

The banking titan also said it will conduct a separate assessment of its US branch network and cards business, which could be sold at a "sensible" price. Other cash-saving measures include a streamlining of IT operations.

HSBC reported a mixed first-quarter earnings on Monday.

It said net profit surged 58 percent to $4.15 billion the the January-March period on lower taxes and fewer bad debts while pre-tax gains were hit by rising staff costs and money set aside to compensate British customers who were mis-sold credit insurance.

HSBC was founded in Hong Kong and Shanghai in 1865 and the bank regards Asia as its most important region.

© 2011 AFP

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