Lots of platitudes but little red meat

WITH around £1.5 trillion of assets on its balance sheet, HSBC is practically the size of a country. Perhaps that’s why most of the ideas unveiled at yesterday’s hotly-anticipated “strategy day” seem to have been stolen from a Whitehall efficiency review.

First there was the £100m saving that will come from a “reduction of paperwork”. A further £300m will be saved by “de-layering and simplifying regional structures” (whatever that means). Then there is the de rigueur overhaul of the bank’s computer system; investors weren’t told how much this novel idea will save in the end, but they were led to believe it will slash a huge amount from costs.

Just like Whitehall mandarins, HSBC executives were curiously tight-lipped about what assets the bank plans to flog, save for yet another “review” of some US operations, and the number of jobs it is going to cut. The bank must surely have a plan for cutting red meat if it is serious about saving at least $2.5bn by 2013, but it certainly didn’t let investors in on the secret yesterday.

Despite 200 pages of presentations that took nine hours to get through, there was remarkably little that was new in yesterday’s announcements. We do know that the bank is likely to quit retail banking in Poland, Spain and Italy, like it has in Russia and that – surprise, surprise – it wants to divert capital to fast growing emerging economies: who wouldn’t? But the new return on equity target of at least 12.5 per cent was well-trailed, as was the goal of reducing the cost efficiency ratio – which is stubbornly high – to at least 52 per cent.

It is strange that yesterday was such a damp squib. Stuart Gulliver, the recently-installed chief executive, has coveted the top job for many years, and made no secret of the fact. Investors were expecting an explosion of ideas, underpinned by radical thinking, not platitudes and techno-babble.

During his three decades of loyal service to HSBC, Gulliver has demonstrated a huge amount of patience. Now he needs to up the tempo.