Our objective is to become the world’s leading international bank. Our strategy is aligned to two long-term trends:
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, Latin America, the Middle East and 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. By 2050, we expect 18 of the 30 largest economies will be from Asia, Latin America or the Middle East and Africa
HSBC is one of the few truly international banks. Our advantages lie in the extent to which our network corresponds with markets relevant to international financial flows, our access and exposure to high-growth markets and businesses, and our strong balance sheet, which helps to generate a resilient stream of earnings.
Based on these long-term trends and our competitive position, our strategy has two parts:
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
To implement this strategy we have set three priorities for the Group: grow the business and dividends; implement global standards; and streamline processes and procedures.
Grow the business and dividends
We continue to position HSBC for growth, generating capital to invest in mostly organic opportunities in our home and priority growth markets, while progressively growing the dividend.
We aim to achieve growth by leveraging our international network and client franchise to improve HSBC’s market position in products aligned to our strategy. Our investment priorities include Global Trade and Receivables Finance, Payments and Cash Management, Foreign Exchange and services relating to the Chinese currency, the renminbi. We also aim to continue investing in key growth markets and align global resources to city clusters with fast-growing international trade and capital flows.
Implement global standards
We aspire to set the industry standard for knowing our customers and detecting, deterring and protecting against financial crime. We are adopting the highest or most effective financial crime controls and deploying them everywhere we operate. Delivering on this means introducing a more consistent, comprehensive approach to managing financial crime risk:
Our anti-money laundering (AML) policy sets out global requirements for carrying out customer due diligence, monitoring transactions and escalating concerns about suspicious activity
Our global sanctions policy aims to ensure that we comply with local sanctions-related laws and regulations in countries where we operate, as well as with global sanctions imposed by the UN Security Council, European Union, US, UK and Hong Kong governments
Over time, we expect these standards to provide a source of competitive advantage.
Streamline processes and procedures
Since 2011, we have changed how HSBC is managed by introducing a leaner reporting structure and establishing an operating model with global businesses and functions. We continue to refine our operational processes, implement consistent business models and streamline IT. This will release capital that can be reinvested in growing our business as well as increase returns to shareholders.
We aim to achieve a return on equity of more than 10 per cent over the medium term and 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.