NEW YORK (The Deal) -- The U.K.'s HSBC on Tuesday initiated its second sweeping restructuring within just over four years, as it confirmed the sale of operations in Turkey and Brazil, but said it would hold on to and turn around units in Mexico and the U.S.
The London-based lender, Europe's largest bank by market value, said it plans to reduce risk-weighted assets by $290 billion, or a quarter, and cut up to 25,000 full-time jobs worldwide to save between $4.5 billion and $5 billion by the end of 2017.
It confirmed plans to sell operations in Turkey and Brazil, for which it has already begun auctions, in order to shed risk-weighted assets of a combined $110 billion. In Brazil, where suitors for its business include Banco Santander Brasil and Banco Bradesco, HSBC said it will maintain operations serving large companies operating internationally.
The greatest slice, or $140 billion, of HSBC's targeted $290 billion reduction in risk-weighted assets will come from slashing its investment banking unit so that it accounts for less than a third of its overall business, down from 43% at present.
"Overall, HSBC's planned restructuring is more than expected," noted Credit Suisse analyst Carla Antunes-Silva. "We think the market will initially welcome the planned capital reduction to the IB [investment bank], as well as the more extensive reductions to overall group RWAs."
But she suggested that an unchanged return on equity target of more than 10% in 2017 and static capital return targets were disappointing.
HSBC shares were down marginally by mid-afternoon in London. The company has market value of about £120 billion ($183.7 billion).