HSBC faces analyst calls to cut investment bank, Americas units

London:

HSBC Holdings Plc should trim its investment bank and sell underperforming consumer operations in the Americas to revive falling profitability, analysts at Citigroup Inc. and JPMorgan Chase & Company said. Europe’s largest bank cut its target for return on equity, a measure of profitability, to more than 10 per cent in February from at least 12 per cent after annual profit missed analysts’ estimates. HSBC will make a 9 per cent ROE this year, Citigroup predicts, amid higher capital requirements and falling capital- markets earnings.

The bank’s reputation has also been damaged by a tax-evasion scandal at its Swiss private bank and it was hit hardest by an increase to a levy on lenders’ balance sheets in the UK budget, prompting speculation it could re-domicile to Asia. HSBC will update investors on its strategy on June 9.