Net income rose to $16.8 billion last year from $13.2 billion in the previous 12 months, meeting the $16.5 billion median estimate of 24 analysts surveyed by Bloomberg. The lender expects to meet its target of a 12-15% return on equity by 2013, London-based HSBC said in a statement.
Chief executive officer Stuart Gulliver is cutting 30,000 jobs and withdrawing from less profitable markets to save as much as $3.5 billion of costs by 2013 and revive profit after more than $65 billion of losses on souring loans in North America. Barclays, a British competitor, said last week it may fail to hit its 13% profitability target by 2013.
The strength of our position gives us confidence that, by the end of 2012, we will have developed a clear trajectory towards meeting our target of 12-15% by the end of 2013, Gulliver, 52, said in a statement.
Return on equity rose to 10.9% from 9.5% last year, still short of the lenders target range. Costs as a proportion of revenue climbed to 57.5% from 55.2% on wage inflation and the UKs levy on bank balance sheets, the lender said. Thats more than the 48-52% target range set by HSBC.
Gulliver said the lender had made $900 million of savings and expects to meet the upper end of its cost- reduction target by 2013. The lender, which gains most of its profit from Asia , has announced $4.89 billion of asset sales since May.