LONDON, Feb 23 (Reuters) - HSBC has given its four problem businesses in Brazil, Mexico, Turkey and the United States as little as one year to prove their worth before “more extreme” turnaround solutions are proposed, its CEO said on Monday.
Chief Executive Stuart Gulliver told analysts he would consider disposals to simplify the bank and improve returns, although he declined to say if any of the four big trouble countries could be sold.
“We’re involved at the moment in fortnightly calls ... on Brazil, Mexico, United States and Turkey, which are clearly the four which present the biggest problems in this regard (improving them),” Gulliver told a conference call after HSBC reported a 17 percent drop in pretax profit.
“We absolutely need to turn them round, or we would need to think of more extreme solutions to the problem.”
Asked how long the businesses had to prove their worth, Gulliver said: “I think we’re talking 12 to 24 months.”
Gulliver said there were also parts of its investment bank and commercial bank that need to improve returns.
“There are parts of the Group that aren’t offering a return that’s anywhere near their cost of equity ... and there are no options in terms of that restructuring that we would not consider.”
The four countries are four of HSBC’s most important. It has 21,000 staff in Brazil, 17,000 in Mexico and 15,000 in the United States and has pinpointed Turkey as one of its priority growth markets. (Reporting by Steve Slater, editing by Sinead Cruise)