HSBC says cost control trumps revenue in 2023

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Inflation is driving significantly higher spending at HSBC, forcing it to be ‘rough’ on costs in order to meet its financial targets.

HSBC aims to limit cost growth to no more than 2%, but based on its current trajectory, it sees a potential 6-7% increase in underlying spending, and it may miss its annual target of 500 million. of dollars, according to the Chief Financial Officer Ewen Stevenson.

“We’re seeing pretty broad cost inflation,” Stevenson told a New York conference hosted by Barclays, adding that half of the bank’s costs are in fixed compensation and that could “significantly” increase in 2023. .

Growth control

According to Stevenson, the “only way” to solve this problem is to be “pretty brutal internally on the costs”, adding that he and the general manager Noel Quinn both have a “bias to focus on cost control rather than revenue growth.”

“A lot of it depends on the commitment of the CEO,” according to a “Bloomberg” report from the conference that cites Stevenson. “He’s been pretty clear internally about his intention to hit that 2% cost target. So as long as he wakes up every day feeling that, I feel like I’m in the right place.”

Ping a chat

HSBC also spoke about Ping An’s call for a break, noting that although he disagreed with the proposal, he was still in dialogue with the Chinese insurer and the bank’s largest shareholder.

“Where we agree is that the bank has underperformed,” he said. “The structural alternatives, I think we have a clear difference of view.”

Additionally, Stevenson also said he expects share buybacks to resume in the second half of 2023, consistent with his previous statements that further buybacks in 2022 would be unlikely.

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