The bank will incur US$1.8 billion in charges over the next two years because of the global restructuring
[HONG KONG] HSBC Holdings expects to double down on investment banking operations Asia and the Middle East after exiting key business in Europe and the US, chief executive officer Georges Elhedery said in an interview with Bloomberg Television at an HSBC conference in Hong Kong.
Elhedery said the bank has “great momentum” and expects to reallocate US$1.5 billion in efficiencies into areas of growth and strengths. The bank is “happy with its footprint” and will double down on capabilities on debt and financing as well as Middle East equity capital markets and mergers and acquisitions, he said.
Taking the helm about six months ago, Elhedery has unleashed a sweeping overhaul at the bank, leading to the exit of several senior executives. He combined the commercial and investment banking units and made operations in the UK and Hong Kong standalone businesses. He shuttered most of its mergers and acquisitions and equity underwriting operations in the US, UK and continental Europe.
The restructuring has been endorsed by top shareholder Ping An Insurance (Group), which last week said it is “very happy” with the direction taken by Elhedery, marking a dramatic shift in tone from its combative stance during a year-long fight with HSBC back in 2022.
Shares of the London-based lender have rallied almost 30 per cent in Hong Kong since Elhedery took over on Sep 2.
HSBC will incur US$1.8 billion in charges over the next two years because of the global restructuring. The decisions, which are mainly on severance, are largely done, according to Elhedery.
Elhedery has been removing layers of management from the top down, cutting the number of executives who sit on the re-named key operating committee to 12 from 18. Job cuts across the bank have focused on senior managers, even placing some investment bankers on short-term work arrangements. BLOOMBERG
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