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HSBC to invest $15-17bn as it gets back into 'growth mode'
HSBC has announced plans to invest between $15bn and $17bn in growth and technology as it gets back into "growth mode".
The bank, which is targeting a return on tangible equity of more than 11% by 2020, said it will sustain dividends at currents levels and undertake share buybacks to neutralise any share issuance as a result of scrip dividends.
In a strategy update on Monday, chief executive John Flint said that between 2018 and 2020, the bank is planning to accelerate growth from its Asian franchise, complete the establishment of the UK rind-fenced bank, increase mortgage market share and improve customer service. It also aims to gain market share and deliver growth from its international network, turn around the US business, improve capital efficiency and simplify the organisation.
The bank is aiming to deliver mid-single digit growth in revenue, low to mid-single digit growth in operating expenses, and around 1-2% annual growth in risk-weighted assets. It expects this to result in an improvement in reported revenues as a percentage of reported average RWAs from around 5.9% in 2017 to 7% by 2020.
Flint said: "After a period of restructuring, it is now time for HSBC to get back into growth mode. The existing strategy is working and provides a strong platform for future profitable growth. In the next phase of our strategy we will accelerate growth in areas of strength, in particular in Asia and from our international network.
"We will leverage our size and strength to embrace new technologies, investing $15-17bn primarily in growth and technology, subject to achieving positive adjusted jaws each financial year."
At 1010 BST, the shares were down 0.5% to 726.60p.