Our objective is to be the world’s leading international bank
Our purpose is to be where the growth is, connecting customers to opportunities. We enable businesses to thrive and economies to prosper, helping people fulfil their hopes and dreams and realise their ambitions.
We have developed a two-part strategy that reflects our purpose and competitive advantages:
A network of businesses connecting the world: HSBC is well positioned to capture the growing international trade and capital flows. Our global reach and range of services place us in a strong position to serve clients as they grow from small enterprises into large multinationals
Wealth management and retail with local scale: we aim to capture opportunities arising from social mobility and wealth creation in our priority growth markets, through our Premier proposition and Global Private Banking business. We will invest in full scale retail businesses only in markets where we can achieve profitable scale
The world economy is becoming ever more connected, with growth in world trade and cross-border capital flows continuing to outstrip growth in average gross domestic product. Over the next decade we expect 35 markets to generate 85 per cent of world trade growth with a similar degree of concentration in cross-border capital flows.
Of the world’s top 30 economies, we expect those in Asia, the Middle East and North Africa to increase in size approximately four-fold by 2050, benefiting from demographics and urbanisation. By this time they will be larger than those of Europe and North America combined. We expect Asia to contribute nearly 50 per cent of global GDP growth between now and 2050.
HSBC is one of the few truly international banks. We have an unrivalled global presence with access to more than 85 per cent of global trade and capital flows. Our network connects faster-growing and developed markets. We have a diversified universal banking model that provides stable funding, liquidity and a low risk profile. Strong capital generation supports our ability to pay industry-leading dividends and helps us to meet capital requirements. These are distinct competitive advantages.
Investor Update 2015
Since 2011, we have materially transformed our business in line with our strategy. At our Investor Update in June 2015, we outlined plans to further reshape our business. We will redeploy resources to capture expected future growth opportunities and adapt to structural changes in the operating environment.
We have set out 10 actions to be completed by 2017:
Reduce risk-weighted assets across the Group by 25 per cent or more and reinvest the capital in higher-performing businesses. Reducing risk-weighted assets will help our Global Banking and Markets business reach profitability targets
Continue to optimise our global network and reduce complexity through the ongoing application of the six-filter process that guides our decisions on where we do business*
Leverage our international network and strategic opportunity in the area covered by the North American Free Trade Agreement (NAFTA) to rebuild profitability in Mexico and deliver satisfactory returns in the US
Set up a UK ring-fenced bank
Make USD4.5-5.0 billion in cost savings
Deliver revenue growth above GDP growth from our international network
Capture growth opportunities in Asia including in China’s Pearl River Delta, in the Association of Southeast Asian Nations (ASEAN), and in our Asset Management and Insurance businesses
Grow business from our global leadership position in the internationalisation of the Chinese currency, the RMB
Complete the implementation of Global Standards, our globally consistent and rigorous financial crime controls
Complete a review of the location of the HSBC Group headquarters by the end of 2015
We aim to achieve a return on equity of more than 10 per cent by 2017, with momentum for higher returns in the future. We aim to grow business revenues faster than operating expenses on an adjusted basis. We are also committed to delivering a progressive dividend. The progression of our dividend should be consistent with the growth of the overall profitability of the Group and is predicated on our ability to meet regulatory capital requirements in a timely manner.
Delivering these priorities will create value for our customers and shareholders and contribute to the long-term sustainability of HSBC. In the process, we shall maintain a robust, resilient and environmentally sustainable business in which our customers can have confidence, our employees can take pride and our communities can trust.
* We use six filters to guide our decisions about when and where to invest. The first two – international connectivity and international development – determine whether the business is strategically relevant. The next three – profitability, efficiency and liquidity – determine whether the financial position of the business is attractive. The sixth filter – the risk of financial crime – governs our activities in high-risk jurisdictions, and is applied to protect us by restricting the scope of our business where appropriate.