HSBC, which is based in London but made two thirds of last year's profit in Asia, has axed more than 40,000 jobs and sold or closed 60 businesses over the past three years to cut costs, but has not yet reached its cost efficiency and profitability targets.
"Having made good headway in pulling out of low-quality businesses, they are now facing the headwinds of emerging markets," said Chris Wheeler, an analyst at Mediobanca. "It's not a disaster, but they are paddling hard to make any progress."
Wheeler has a "recommendation on HSBC shares.
HSBC shares were down 3.4 percent at 632 pence by 1215 GMT, the weakest performer in a flat European banks index. They fell to 617p, their lowest since November 2012, and have underperformed rivals this year due to HSBC's greater exposure to markets in Asia, the Middle East and South America.
HSBC said it increased its bonus pool for staff by 6 percent to $3.9 billion last year, and lifted Gulliver's pay, including salary and bonuses, to $8 million from $7.5 million.
The increase comes despite pressure on banks to rein in big bonuses that many blame for fuelling the risk-taking that led to the 2008/2009 financial crisis.
HSBC said it would start paying 665 top staff a new quarterly allowance - either in cash or deferred shares - effectively increasing the amount of their fixed pay to meet a new EU law capping bonuses at 200 percent of salary.
Gulliver said major shareholders supported the plan, but that the EU rules had made pay structures more complex and he hoped the UK government will be successful with a legal challenge to the move.
"We had a compensation plan here that the shareholders liked but sadly because of the EU directive we've had to change. This isn't something we would have wanted to do... It's much more complicated," Gulliver told reporters on a conference call.
Under the new structure, senior bankers will be guaranteed more pay, but the maximum they can get will be reduced. Gulliver will be guaranteed $4.2 million, up from $2.5 million before, and can earn up to $11.4 million, down from $13.8 million.
Gulliver is under pressure to show how HSBC can replace income lost from the sale of U.S. businesses and a stake in a Chinese insurer, and worries that Asia's economic growth is slowing.
He remained optimistic about longer-term prospects for emerging markets, which have been hit hard by a U.S. decision to wind down stimulus measures, but warned of "greater volatility in 2014 and choppy markets".
He predicted China's economy would grow by 7.4 percent this year, Britain's should expand by 2.6 percent, the United States by 2.5 percent and western Europe 1.2 percent.
HSBC reported 2013 pretax profit of $22.6 billion, up from $20.6 billion in 2012 but below the average forecast of $24.3 billion in a Thomson Reuters poll.
Shutting businesses hit the bank's revenues, which fell 5 percent. Stripping out the impact of disposals, underlying revenue was $63.3 billion, up from $61.6 billion.
HSBC said it continued to build up capital, while it remained unclear how much it would need to hold under global and UK rules. It will pay a final 2013 dividend of 19 cents per share, up on 2012 but less than expected by analysts.
"There is some degree of prudence and caution until we get greater clarity on the capital management framework for the banking sector in Europe and the UK," said Finance Director Iain McKay.
The bank's common equity ratio improved to 10.9 percent at the end of December from 9.5 percent a year earlier. But it said changes by the UK regulator would knock up to 0.35 of a percentage point off that ratio this quarter.
HSBC has said it could buy back shares to use excess capital, but Gulliver said that would not happen this year.
HSBC's investment bank reported a flat fourth quarter, with pretax profit of $1.9 billion, as a drop in revenue from its rates business was offset by a strong quarter in equities.
Gulliver said he had now cut $4.9 billion in costs on an annualised basis, and the bank was aiming for $2-3 billion more a year by the end of 2016.
The bank's cost efficiency ratio of 59.6 percent and its return on equity ratio of 9.2 percent were both below the target ranges of mid-50s and 12-15 percent that the bank has set itself for the next three years.
It set aside another $395 million in the fourth quarter to compensate UK customers mis-sold loan insurance or companies mis-sold interest rate hedging products, and it also paid $321 million more than a year earlier under a UK bank levy.