One of the leading European banks, HSBC has announced to cut back its retail banking operations in some countries in order to focus on profitability. The bank will limit its retail operations to most profitable countries only.
 
The Chief Executive of HSBC, Stuart Gulliver, said, “This is not about shrinking the business but about creating capacity to reinvest in growth markets and to provide a buffer against regulatory and inflationary headwinds”.
 
Despite the cut in operations, the bank has also set a target for its cost efficiency ratio of 48% to 52%. Recently the bank has announced that its cost as a proportion of income increased to 60.9% in the first quarter of financial year as compared to 49.6% last year.
 
The bank has taken the decision to cope up with the new financial regulations which requires it to maintain higher capital reserves.
 
Meanwhile, the shares of HSBC fell 0.6% on the London Stock Exchange in the early hours trading and were traded at 652.1 pence. At present, the shares of the bank are lagging behind that of Deutsche Bank, JPMorgan Chase and Barclays.