By Steve Slater
LONDON, May 5 (Reuters) - HSBC is set to extend asix year overhaul of its U.S. business to revive its fortunesrather than add it to the 77 businesses sold in the past fouryears, the British bank's boss said on Tuesday.
HSBC Chief Executive Stuart Gulliver has said he could sellunderperforming businesses in the United States, Brazil, Mexicoand Turkey if they cannot be turned around.
Although no decisions had yet been taken on their future,Gulliver said the bank was likely to remain in the United Statesgiven the importance of dollar clearing for its trading businessas well as providing access to U.S. companies.
"You should still expect a restructuring story," he said ofthe U.S. business, adding not to expect a 'drastic' outcome.
HSBC has started a sales process for its retail banking inBrazil and Turkey, but the U.S. and Mexico businesses werelikely to be kept, people familiar with the matter have said.
HSBC's disastrous 2003 purchase of consumer lender Householdleft it as one of the biggest U.S. subprime lenders when thehousing market crashed in 2007, landing it with more than $50billion in losses and a lengthy restructuring job. It sold itsU.S. credit card arm and half its branches there in 2011.
Gulliver said the U.S. business had problems but Americancorporates were big clients overseas, having access to dollarclearing supported its trade business and investment bank, anddeposits from the retail bank helped fund other areas.
"The profitability of the U.S. business on its own somewhatunderplays the significance of it, because there's substantialrevenues from U.S. companies that get booked in places likeChina, Saudi Arabia, Mexico that wouldn't come about if we werenot in the United States," he said.
Gulliver is under pressure to get return on equity above 10percent, from 7.3 percent in 2014, and to cut costs, especiallyin Europe and North America, where they are well above target.
His task in the United States is to continue to run down alegacy loan book, cut costs and grow revenues to improveprofitability, he told reporters after HSBC reported a 4 percentrise in first quarter profits.
HSBC made a $532 million profit in the United States lastyear as retail banking bounced back into profit, but that wasless than the bank made in Canada and the U.S. business requiresa lot of capital.
Its consumer and mortgage lending portfolio was down to $21billion at the end of March from $25 billion at end-December and$118 billion at its peak in 2008, but because of the high risknature of the loans, HSBC had to hold capital equivalent to $49billion of assets on a risk-weighted basis. (Reporting by Steve Slater, editing by Louise Heavens)