HSBC chief Stuart Gulliver to unveil cost cutting plans

HSBC is expected to launch a cost cutting drive at its UK retail banking arm, which will be unveiled by new group chief executive Stuart Gulliver. The drive could be possibly extend to branch sales at the bank.
 
An option to lower the division's cost/income ratio, which stands higher than that of both Barclays and Royal Bank of Scotland, is said to be the possible removal of the UK retail business's head office staff from global HQ at London's Canary Wharf. According to analysts, Gulliver, who is to present his strategy at Canary Wharf on 11 May, may also centralise UK retail costs and remove some middle management.

Another option according to analysts is the sale of a tranche of retail branches.

Among other possible options said to be being considered are
centralisation of certain costs and removal of layers of middle management. These are intended to make the division more streamlined and ensure front-line problems get priority by senior management.

Analysts say Gulliver will probably move to stamp his mark on the bank, explaining where he would like to see HSBC in five years and how he intends to get there.

However, they say that with 10 days ahead, there concerns among some investors as to how the day is being organised. Not much is known about how the day would be structured, or even whether Douglas Flint, the new chairman of the bank who was formerly its chief financial officer, would attend.

The review is taking place against the backdrop of the Independent Commission on Banking, which will make known its recommendations in September. According to an industry source, a separation of the bank's head office staff would be a suitable move were Gulliver to consider a sale of the UK retail business later.

On the day, Gulliver is expected to set out a strict new ethos, according to which individual businesses would be required to contribute capital or face being restructured or sold.

According to analysts, the move would see Gulliver focus on specific countries in a shift away from being the "world's local bank".