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HSBC: how restructuring impacts the dividend

HSBC London headquarters

When we expanded our Income Boosters portfolio in January, FTSE 100 banking giant HSBC Holdings (LON: HSBA) was one of the new additions. This Asia-focused heavyweight has now published its 2019 results, along with details of a fairly brutal restructuring programme.


Lifetime staffer and interim chief executive Noel Quinn plans to cut annual ongoing costs by $4.5bn and shed $100bn of risk-adjusted assets by 2022. The group's investment banking operations will be scaled back, leaving them focused on Asia, the Middle East and London. Operations in Europe and the US will be downsized. These changes are expected to cost about $7.2bn to deliver. If successful, Mr Quinn expects the group's return on tangible equity to rise to between 10% and 12% in 2022, up from 8.4% in 2019.

HSBC makes most of its profits in Asia. We believe this will remain a…

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