By Marcus Leach

HSBC is set to cut the scale of its wealth management and retail divisions in a bid to save £2 billion.

Europe's biggest bank, announced on Wednesday, they will also look to streamline their IT operations, but didn't say how many jobs would be cut as a result of this.

Profits were lower than expected as a rise in costs took its toll, and now the bank will look to cut operational costs from 61% in the first quarter to between 48-52% by 2013.

A statement released by the bak said that there will be a renewed focus as they turn the attention of their wealth management business to eighteen key economies, as well as limiting retail banking to markets that can achieve profit.

The bank has identified several fast growing economies where they will direct new investment, including Mexico, Turkey, Asia and the Middle East.

The bank said it would be directing investment into fast-growing national economies including Mexico and Turkey, and to certain wider regions, such as Asia and the Middle East.

However, one country from which it said it would be withdrawing its retail banking operations is Russia.

Stuart Gulliver, HSBC chief executive, revealed that the bank was facing "important challenges" and that it would "dispose" of some business units.

"Our strategy is to be the leading international bank, concentrating on commercial and wholesale banking in globally connected markets," he added.

"This is not about shrinking the business but about creating capacity to re-invest in growth markets."