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HSBC to invest $15-17 billion by 2020 as strategy pivots to growth

Reuters  |  LONDON 

By Lawrence White

LONDON (Reuters) - will invest $15-17 billion in the next three years in areas including technology and its core Asian markets of Hong Kong and as it swings from a strategy of cost-cutting to growth, new said on Monday.

The announcement is Flint's first public indication to shareholders of the strategy he intends to pursue at HSBC, which has struggled to meet its profit goals in recent years after a shrinking of its global empire also cut income.

The update marks a definitive pivot in HSBC's post-2008 crisis strategy, from cost-cutting and restructuring to investment and expansion as it seeks to improve returns.

The is targeting a return on tangible equity of 11 percent by 2020, Flint said, and will sustain its dividends at current levels.

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

The main points of the bank's refreshed strategy will likely come as little surprise for investors, with the focus squarely on further expansion in and its prosperous southern region in particular.

The will also pursue further expansion in the British mortgage market as one of eight new strategic targets, HSBC said.

HSBC shares showed little reaction to the announcement, remaining flat at 0852 GMT compared with as 1 percent rise in the British index.

The has found no silver bullet for its underperforming U.S. business, the strategy update released to investors on Monday showed, with HSBC set to focus on trying to grow its market share among internationally-focused mid-sized companies.

Flint in February said the bank was reviewing its U.S. franchise, which has suffered from lack of scale and the consequences of its disastrous $15 billion acquisition of Household in 2003.

(Reporting by Lawrence White; Editing by Jason Neely/Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, June 11 2018. 14:35 IST