(27 January 2025 – Global) HSBC is mulling options for its retail banking operations in Australia and investment banking divisions in Europe and LatAm as it continues to scale back its global footprint.
HSBC’s Australian consumer banking segment, which includes over 40 branches and offices along with retail loan books and customer accounts, may be a takeover target for the Big Four majors which could include a sale as part of a broader effort to streamline its global business.
The announcement comes in the wake of ASIC commencing legal action after the bank failed to respond fast enough to suspicious customer bank account activity but also follows exits from several other low-returning consumer banking markets including France, Greece and Canada.
HSBC also plans to wind down its M&A and selected ECM units in Europe and the Americas, accelerating a shift to Asia in its largest retrenchment from investment banking in decades. The group will retain its DCM and leveraged acquisition finance operations globally.
Matching a similar move by Citi to “right size” the business with its ongoing Project Bora Bora restructuring drive and extensive layoffs, the bank is closely running the ruler over its dealmaking and corporate advisory activities to boost returns and tighten its focus on Asia, where the lender already earns the lion share of its profit.
“The new structure will ensure we can better focus on the businesses where we have clear competitive advantage and the greatest opportunities to grow and will help us to deliver best-in-class products and service excellence to our customers” HSBC CEO Georges Elhedery commented.
“Our intention is to move to a more competitive, scalable, financing-led model. We will retain a core focus on M&A and equity capital markets capabilities in Asia and the Middle East” stated HSBC Bank CEO Michael Roberts.
“I’ve lost count of the number of times HSBC has been in and out of ECM in the UK. It never seems to succeed. At the end of the day, these are expensive businesses to run and if you are not winning the business and generating the fees then it’s easy to lose money” said Shore Capital Analyst Gary Greenwood.