HSBC: making withdrawals

The front of HSBC's annual report does not feature a picture of the statue of Christ the Redeemer in Rio. Nor is there a photo of the Suleymaniye mosque in Istanbul. This makes sense: neither its Brazilian or Turkish retail operations are important to the investment case for the bank. So any decision to close those operations would look like a prudent excision of weak, peripheral bits of the portfolio - and the Hong Kong waterfront can keep its place on the cover.

Between them, the Brazilian and Turkish retail businesses account for about $11.6bn of customer loans, out of a group total of just under $1tn. Neither has been great recently. Brazilian retail lost $174m last year. It also lost money in 2013. Without that 2014 loss, profits from the bank's Latin American unit would have been 81 per cent higher. In Turkey, the loss from retail banking doubled last year to $155m, partly due to higher delinquency in credit cards.

HSBC has been getting rid of unwanted businesses since Stuart Gulliver became chief executive in 2011. It has exited 14 countries entirely, as well as retail operations Russia and South Korea. As part of the latest plan, investment banking could be trimmed. On one level, this looks like the sort of pruning that every business should do from time to time.

Yet closing or selling the retail businesses in Brazil and Turkey would raise questions about HSBC's retail strategy. The annual report classifies both countries as "priority growth markets". Brazil may be going through a sticky patch right now, but if you want shares in a bank with broad exposure to retail banking in emerging markets, surely Brazil would have to be part of the mix. There is a fine - and tricky - balance to be struck between cherry picking the strongest markets and ensuring that the bank has long-term, strategic coherence. Mr Gulliver has to prove he can be a master topiarist, rather than just an enthusiastic user of garden shears.

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