On Tuesday, HSBC Holdings PLC (0005, +0.88% HSBC, +0.40% HSBA, +0.10%) announced that they would cut their asset base which is risk weighted by $290 billion.
Added to this, the multinational banking and financial services company will also sell off its units in Turkey and Brazil.
This move is being made in order to cut costs as well as to try and achieve a more than 10 percent return on equity by the year 2017.
This announcement by HSBC was made on Tuesday afternoon in Hong Kong in a filing to the Hong Kong stock exchange and it was delivered before HSBC provided their investor update and announced their overhaul plans.
HSBC also stated that they intend to boost investments in Asia, particularly in Southeast Asia and in China. According to Stuart Gulliver, the Chief Executive Officer of HSBC, the company is also planning to set up a ring-fenced bank in the United Kingdom and will then locate between $4.5 billion to $5 billion in cost savings so that flat costs will be delivered by the end of 2017.
Regarding the ongoing discussion regarding HSBC’s plans to move the group’s headquarters to Hong Kong from London, Gulliver stated that the matter is still under review and a final decision will be made by the end of 2015.
During the morning trading session in Hong Kong, the shares of HSBC gained 0.6 percent. This marked an outperformance compared to the 1 percent decline for the Hang Seng Index (HSI, -1.07%).
HSBC is the most heavily weighted component of the Hang Seng Index and shares of HSBC are currently trading at $619.50 each.
MT4 Chart: HSBC
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