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* Half job cuts to come from sale of Brazil, Turkeybusinesses
* Bank to cut risk weighted assets by a quarter, or $290 bln
* New return on equity target of above 10 pct by 2017
* Will rebrand its UK retail bank
* Review of whether to move HQ to be completed by year end (Adds details on Brazil/Turkey sales)
By Lawrence White and Steve Slater
HONG KONG/LONDON, June 9 (Reuters) - HSBC pledged anew era of higher dividends on Tuesday, laying out plans toslash nearly one in five jobs and shrink its investment bank bya third to combat sluggish growth across its sprawling empire.
Chief Executive Stuart Gulliver has made it his mission toboost profits since taking the helm of Europe's largest bank byassets in 2011 but his efforts have so far been foiled by highcompliance costs, fines and low interest rates.
In the bank's second big overhaul since the financialcrisis, it will speed up a cull of unprofitable units andcountries by cutting almost 50,000 jobs - half of them fromselling businesses in Brazil and Turkey.
The bank also planned to increase its business in Asia,particularly in China.
HSBC will cut its assets by a quarter, or $290 billion on arisk adjusted basis (RWA), by 2017, and slice $140 billion fromits investment bank, which will subsequently make up less than athird of HSBC's balance sheet from 40 percent now.
Gulliver also pledged higher payouts for investors. "Ibelieve that we are in the foothills of another prolonged periodof dividend growth for the firm," he said. The bank's dividendhad grown for 17 years from 1991 to 2008.
But investors were cautious about how HSBC would translatejob cuts into meaningful savings given the higher cost of doingbusiness in a tougher post-crisis business environment marked bynew rules on risk and compliance.
"Slaughtering the staff is not necessarily the solutionunless management makes the bank considerably less complex,"said James Antos, analyst at Mizuho Securities Asia.
HSBC shares dipped 1.1 percent by midday, pressured also bydisappointment after the bank cut its target for return onequity to greater than 10 percent by 2017, down from a previoustarget of 12-15 percent by 2016.
European rivals including Barclays, RBS, UBS and Deutsche Bank have axed thousandsof jobs, but many are facing fresh calls for more radical cutsin investment banking given tough operating conditions.
Some investors and analysts reckon HSBC should considerbreaking up, on the grounds that extra compliance and regulatorycosts outweigh the benefits of scale.
But Gulliver defended the bank's global footprint anduniversal strategy.
"The answer isn't the network should be broken up, the issueis there are four or five countries that are a major problem,"Gulliver told investors and analysts during a five-hourpresentation. He cited Brazil, Turkey, Mexico, the United Statesand Britain as countries where weak performance or high conductcosts and fines had destroyed value.
He estimated the bank achieved $34 billion of revenuebenefits from its size and diversity, including $22 billion ofclient revenue stemming from its international network.
NO SACRED COWS
Jobs will be cut by introducing more automation andconsolidating IT and back office operations, and the bank saidit would close 12 percent of branches in its seven biggestmarkets. It has 5,800 branches globally.
Gulliver said about 7,000-8,000 job cuts would be inBritain, or one in six UK staff. The UK retail banking businesswould also be rebranded to meet new rules designed to ringfencecustomer deposits from riskier investment banking operations.
Gulliver said it was too early to say whether the groupwould keep the ring-fenced bank, which will be headquartered inthe English city of Birmingham and account for about two thirdsof UK revenues, or $11 billion.
The bank also set out 11 criteria for helping it decidewhether to move its headquarters from London to Asia, likelyHong Kong, including factors such as economic growth, taxsystems and long-term stability.
HSBC said it would complete the review of the possible moveby the end of the year, and its strategy update clearly marked agreater shift to Asia, where it plans to redeploy assets cut inEurope and the Americas.
In particular, it plans to increase the size of itsinsurance business and its presence in China's Pearl RiverDelta, a region in southern Guangdong province into whichBeijing wants to integrate Hong Kong and which alreadyrepresents a major economic hub.
"The cuts provide significant headroom for the group tofund asset growth in Asia and absorb RWA inflation, whilstprotecting its ability to pay a progressive dividend," saidGurpreet Singh Sahi, analyst at Goldman Sachs.
The sale of businesses in Brazil and Turkey, where HSBC isthe sixth and 12th biggest bank respectively, will cut $110billion of risk-weighted assets.
HSBC could fetch more than $4 billion for the pair. Bradesco is seen as the front-runner to buy in Brazilwhile three banks - BNP Paribas, ING andBahrain's Arab Banking Corp - are in talks for theTurkish business, a source said.
Gulliver said the sales showed there were "no sacred cows".
The bank is closely monitoring efforts to turn around itsbusinesses in the United States and Mexico, with Gulliver makingfortnightly calls to the management in both countries.
Overall, HSBC will push through annual cost savings of up to$5 billion by 2017. It will cost up to $4.5 billion in the nextthree years to achieve the savings. (Additional reporting by Donny Kwok, Matt Scuffham and AsliKandemir; Editing by David Clarke, Sophie Walker and GilesElgood)
