HSBC lowers equity return target, to shrink asset base by $290 billion, cut 50,000 jobs

HONG KONG: Shares of HSBC turned choppy after slipping over 1% in early trade on the London Stock Exchange even as the Europe's biggest bank said it would cut almost 50,000 jobs from its payroll, reduce its asset base by $290 billion, sell units in Brazil and Turkey and shrink its investment bank in an effort to cut costs and improve its sluggish performance.

The announcement from the bank came ahead of a presentation to investors and analysts by Chief Executive Stuart Gulliver that will give more detail on his second major strategic plan since he took the helm at the start of 2011.

The new strategy, which involves shrinking the global banking and markets division to less than one third of HSBC's $2.6 billion balance sheet from its current level of around 40 per cent, marks a significant shift for the lender. HSBC also set its new target for return on equity at greater than 10 per cent by 2017, down from its previous target of 12-15 per cent by 2016.