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HSBC on restructuring spree

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Stuart Gulliver - CEO at HSBC Holdings Plc

Stuart Gulliver - CEO at HSBC Holdings Plc

The restructuring spree of HSBC Holdings Plc is likely to continue as the European bank aims to improve its performance. It is widely speculated that HSBC CEO Stuart Gulliver will inform about further downsizing and sales of some assets on the 15th of May.  Investors expect to hear that a 3-year restructuring plan has started bearing fruits.

Restructuring at HSBC

The fact is that Stuart Gulliver, chief executive officer at HSBC Holdings Plc, has still approximately one year to implement aforementioned 3-year restructuring plan and the time is his ally. On the 15th of May, he is expected to share information on the outcomes of  the implementation of this plan with the shareholders.

Not surprisingly, investors expect to hear good news regarding the ongoing restructuring process. Analysts agree that HSBC CEO Stuart Gulliver has achieved many goals which are included in the plan as the European bank is indeed concentrated on changes aimed at bringing improvement.

Therefore it is not surprising that HSBC Holdings Plc has been on the sale spree as CEO Stuart Gulliver has been trying to get rid of some businesses which are not in line with the bank’s strategy. Thus the recent sale of the Korean insurance business is indeed only confirmation of the 3-year restructuring plan.

No wonder that HSBC Holdings Plc is believed to continue with the disposal of insurance businesses and minority stakes. And the fact is the disposal process in going well as the bank has already got rid of more than 50 businesses. What is interesting is that so far in 2013, HSBC Holdings Plc has weeded out nine units, just to mention the business located in Panama or the stake in the Korean insurer. Along with the disposal of its businesses, HSBC Holdings Plc downsized to approximately 254,000 positions, compared to roughly 300,000 employed before the reduction plan was presented back  in May 2011.

According to estimates, the sales helped HSBC Holdings Plc get rid of its burdensome businesses, concurrently raising possibility that dividends would be increased. Some analysts are convinced that shareholders will see dividends jump even staggering 30 percent.

However, there are also some black clouds over HSBC Stuart Gulliver as the cost might not be below the accepted goal due to lethargic growth almost everywhere, except Asia. It seems that HSBC Holdings Plc will have to introduce more aggressive approach when it comes to several markets.

Changes to continue

With no or little improvement in several markets, including the crisis-git EU and the US, it is more than likely that HSBC CEO Stuart Gulliver will decide to continue his sale spree.  With harsh economic conditions, analysts even are convinced that HSBC Holdings Plc might get rid of  further units in the near future to improve the company's performance and strengthen its position in the market. Not surprisingly, the bank did not give any details on possible disposals, however experts pinpoint businesses located in Europe as projections for the region are not promising.

HSBC CEO Stuart Gulliver himself once underlined that even though the global economy started to stabilize, still the company should be aware of possible obstacles on the the restructuring track. Thus analysts note that the restructuring and downsizing might even continue after the completion of the 3-year plan.

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