HSBC overhauls trading business in bid to become debt powerhouse

[LONDON] HSBC Holdings is restructuring its trading division as part of chief executive officer Georges Elhedery’s push to make the lender a powerhouse in the debt financing business.

The firm’s Group-of-10 rates trading unit will be combined with its foreign exchange, emerging markets rates and commodities desks to form a new global macro division, according to a memo to staff seen by Bloomberg News. Derivatives clearing services will be merged into the global equities team, the memo said.

All of the global debt markets’ remaining businesses – from high yield and investment grade trading to the emerging market credit businesses – will now operate under the umbrella of global credit and financing. That team will work closely with HSBC’s investment bankers and underwriters, the memo said.

The changes are designed to “enhance client connectivity, operational efficiency” and “support our financing and transaction banking ambitions,” HSBC said in a statement.

For months, Elhedery has been pushing through a massive overhaul of the London-headquartered bank as he hunts for ways to boost returns across its businesses. To that end, he shuttered most of the lender’s advisory and equity underwriting operations in the US, UK and continental Europe, and instead ordered his top deputies to focus on debt capital markets across regions where HSBC has the scale to take on the titans of Wall Street.

With the latest move, HSBC is looking to wield its massive balance sheet in order to win more business in the world of trading and markets.

The new global macro team will be led by Volkan Benihasim, while Franck Lacour will continue to lead the equities division, according to the memo.

HSBC plans to conduct a short, internal selection process for the new head of the global credit and financing business. For now, the division will be led by Antoine Maurel and Monish Tahilramani, who head the markets and securities services business in Europe and the Americas region and the Asia and Middle East region, respectively.

As part of the changes, Mehmet Mazi, HSBC’s head of global debt markets, will explore other opportunities, people familiar with the matter said, asking not to be identified discussing personnel. A 30-year veteran of HSBC, he’s run the debt business since 2020.

The moves reinforce “our ambition to build a financing powerhouse,” Patrick George, HSBC’s global head of markets and securities services, said in the memo to staff. “This means taking a more deliberate approach to technology investments that are fully aligned with our ambition to lead in financing and transaction banking.” BLOOMBERG