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New HSBC strategy to invest up to $17B in tech, Asia by 2020

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New HSBC strategy to invest up to $17B in tech, Asia by 2020

HSBC Holdings PLC plans to invest between $15 billion and $17 billion by 2020, primarily in growth and technology and its core Asian markets.

In a strategy update, the British lender outlined eight targets, including building its presence in Hong Kong and invest in China's Pearl River Delta region, the Association of Southeast Asian Nations and wealth in Asia, including insurance and asset management. HSBC also aims to support the China-led Belt and Road Initiative and the transition to a low carbon economy.

Among the other strategic priorities, HSBC is looking to complete the establishment of its U.K. ring-fenced bank and increase mortgage market share. The bank also aims to turn around its U.S. business, improve capital efficiency and improve customer service through investments in technology.

"After a period of restructuring, it is now time for HSBC to get back into growth mode," CEO John Flint said.

HSBC is targeting a return on tangible equity of more than 11% by 2020, while expecting its common equity Tier 1 ratio to be above 14% throughout the period from 2018 to 2020. The lender also intends to sustain dividends at current levels and launch share buybacks, where appropriate, to balance any share issuance due to scrip dividends, subject to regulatory approval.

HSBC also aims to achieve mid-single digit growth in revenue, low to mid-single digit growth in operating expenses and about 1% to 2% annual growth in risk-weighted assets to achieve its financial targets for the period between 2018 and 2020. The bank expects this to result in an improvement in reported revenues as a percentage of reported average RWAs to approximately 7% by 2020 from roughly 5.9% in 2017.