HSBC's new chief executive yesterday rejected its long-standing claim to be "the world's local bank" as he announced up to $3.5bn (£2.1bn) of cost cuts and a review of retail banking in almost half its markets.
In his first presentation to shareholders, Stuart Gulliver said he would cut back retail banking and return HSBC to its roots to finance trade between developed and emerging economies.
He admitted the bank's shares had stood still in the past decade because it had made a "bad fist" of explaining how its global network operates.
Mr Gulliver said: "Because we have this strapline, 'the world's local bank', people think retail banking is the most important thing in our P&L [profit and loss account]. The money is being made in global banking and markets and commercial banking."
The strapline, one of the most famous in the banking world, still stands but Mr Gulliver made it clear that it contributed to the "myths" about HSBC's business. "We have tried to do everything always and we are not going to do that," he said.
In retail banking, Mr Gulliver said HSBC's two biggest businesses, the UK and Hong Kong, were vital to the group and that it would invest in high growth and strategically important markets such as Brazil, Turkey, China and India.
But he said the bank was sub-scale in 39 markets and that if they did not pay their way in the group they would be closed.
The bank is shutting retail banking in Russia while keeping a corporate banking arm in the country.
The scaling back of retail banking is part of an overhaul to cut costs and connect HSBC's 87-country network to capitalise on global trade flows.
The bank will slash between $2.5bn and $3.5bn from surplus operations and will cut its 296,000 headcount to reinvest in high-growth or important markets. High costs and one-off charges helped drag down first-quarter profits announced on Monday.
The plan includes beefing up HSBC's corporate banking business in Germany's export-led economy and cutting its upstate New York branch network while opening more branches to tap trade between the US and Asia and Latin America.
Mr Gulliver, the former head of global banking and markets, took over as chief executive at the start of this year after triumphing in a bitter boardroom battle that saw his predecessor, Michael Geoghegan, leave the bank.
He insisted he was not criticising Mr Geoghegan's handling of the bank and that this was the first chance for HSBC to look forward after four years in which it concentrated on surviving the financial meltdown.
HSBC expanded before the crisis by doing big deals, including the disastrous $15bn acquisition of Household International – a giant US sub-prime lender whose bad debts rocked the bank and cost it billions of dollars.
Mr Gulliver said he had "no shopping list" of deals. He singled out Household, which was the brainchild of the former chairman Sir John Bond, as a deal that had no connections to HSBC's other businesses.
HSBC shares closed at 646.1p, down 10p or 1.5 per cent.Reuse content