HSBC's new strategy disappoints investors who see repeat of 2011

Investors are having flashbacks to 2011.

The initial reaction to HSBC Holdings' new strategy for restoring strong profit growth, after pre-tax profits fell 17 per cent year on year in 2014, has been cool.

The strategy, announced at a meeting with investors last week, came in the form of 10 points of action but those can be boiled down to a few major moves - many of which echoed the first series of restructuring efforts in 2011.

Grabbing the first headlines were the disposal of loss-making operations in Turkey and Brazil and cutting 25,000 staff, accounting for much of a targeted US$4.5 billion to US$5 billion in cost-savings annually.  Another 25,000 employees would leave the bank with the sell-off of the Turkish and Brazilian businesses.

Drawing closer to the core of the bank’s international investment banking model was the plan to shed US$290 billion in risk-weighted assets from the balance sheet, mainly from global banking and markets, and shift many of those assets eastwards, in a so-called pivot to Asia.

The underwhelming targeted return on equity within two years was 10 per cent, a figure disclosed earlier this year.