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* CEO plans to cut annual costs by up to another $3 bln
* May axe a further 14,000 jobs
* Aims for costs near 55 pct of revenue vs earlier 52 pcttarget
* Bank to consider share buybacks, to grow dividend
* Shares up 0.9 percent
By Lawrence White and Steve Slater
HONG KONG/LONDON, May 15 (Reuters) - HSBC willredouble its cost-cutting efforts, including axing up to 14,000more jobs, but Europe's largest bank was forced to soften a keyperformance target in the face of muted revenue.
London-headquartered HSBC is seeking up to $3billion in additional annual savings by 2016, on top of $4billion already achieved, but sluggish growth outside Asia,particularly in Europe, means its target to get costs below 52percent of revenue has been eased.
The new goal is to keep the ratio near 55 percent, the levelit was at in 2010 - the year before Chief Executive StuartGulliver took over and kickstarted a radical retrenchment at abank that was criticised in the past for "planting flags" aroundthe world.
"We're clearly hitting on the costs, but we're missing onthe cost efficiency ratio because of revenue, which is hard forus to control," Gulliver told reporters. "Top line growth isclearly a challenge."
He added: "We need to have a cost-efficiency target that'srealistic, so we're saying take a look at our peer group, theyare all in the high 50s or low 60s, whether it's JPMorgan, Citi, Standard Chartered or Barclays."
HSBC had a cost efficiency ratio of 63 percent last year,which improved to 53 percent in the first quarter. Banks do notrelease comparable data, but last year JPMorgan's expenses were67 percent of revenue, at Citi it was 65 percent, Barclays hadan adjusted cost/income ratio of 64 percent and StandardChartered's normalised cost/income ratio was 54 percent.
Gulliver, former head of HSBC's investment bank, has alreadycut 46,000 jobs and sold or closed 52 businesses, including aminority stake in Chinese insurer Ping An and its U.Scredit cards.
Such deals have reduced its risk-weighted assets by $95billion and produced gains totalling about $8 billion.
"We're not even halfway through unlocking the value in HSBC.The strategy is not changing, it is working," Gulliver toldanalysts.
Gulliver said the run-off of its U.S. loan book and legacyinvestment bank assets would make it difficult for HSBC to meetits goal of a return on equity of over 12 percent this year, buthe stuck with that target for the future. He also hardened hisgoal on capital, aiming for a core capital ratio of more than 10percent.
HSBC said it would "progressively grow" its dividends andwould introduce a share buyback next year, if investors andregulators give their approval.
That would make it one of the first European banks to buyback shares since the financial crisis. Its aim would be tooffset the impact of its scrip or share dividend, which ispopular with Hong Kong retail investors but causes dilution forshareholders as more than $2 billion of shares are issued eachyear.
BIG ISSUE
"They are doing a good job on costs, capital looks good,balance sheet looks good, but the big issue is when does therevenue growth come through?" said Chris Wheeler, analyst withMediobanca. "The big debate will rage about revenue growth."
Shares in HSBC, the world's third-largest by stock marketvalue after China's ICBC and China Construction Bank, were up 0.9 percent at 753 pence by 1230 GMTagainst a 1.6 percent rise in the European sector.
The stock has risen around 13 percent since the start of2011, compared with a 9 percent drop in the sector.
In the face of weak demand in Europe, HSBC plans to increaserevenue by focusing on high-return markets in Asia, where itgenerated around two-thirds of its profit in the first quarter.
It has scaled back its annual revenue growth targets for itswealth management division by $1 billion to an additional $3billion, blaming tougher regulations for crimping its ability tosell products in countries such as Britain.
Gulliver said the bank was unlikely to spend extra cash onany significant acquisition.
He said the bank could also sell its 8 percent stake in Bankof Shanghai, which he said was likely to be worth between $500million and $600 million. Its 19 percent stake in Bank ofCommunications remain core and was it key China associate, hesaid.
The bank said this week it could sell its private bankingbusiness in Monaco, but its new cost-cutting campaign is set tofocus less on disposals and outright closures and more onstreamlining processes.
The bank said employee numbers could fall to between 240,000and 250,000 by 2016, from 254,000 when current disposals andannounced cuts take effect. It did not say where the additionalcuts would be made, saying only they would be "spread quitethinly around the world".
With the banking industry assailed by a new world order oftougher regulation and weak investment returns, HSBC said itneeded to take its cue from other sectors that faced majorchallenges including telecoms and car making.
In a 83-page presentation for investors, HSBC said therewere still significant opportunities to cut costs by simplifyingoperations, flagging a recent contract it had signed with onevendor to manage its facilities, replacing 1,100 differentsuppliers it had previously.
