(22 October 2024 – Global) HSBC’s chief executive, Georges Elhedery, has announced a major restructuring of the bank, dividing it into four distinct divisions and reorganising its global operations along east-west lines.
The move comes as the bank seeks to reduce costs and better navigate growing geopolitical tensions. Under the plan, HSBC will transform its UK and Hong Kong businesses into standalone entities, each accounting for two of the four new divisions. The remaining two divisions will focus on “corporate and institutional banking” and “international wealth and premier banking”, reflecting the bank’s efforts to streamline its structure and sharpen its regional focus.
The new divisions will be categorised into “eastern markets” for operations in Asia-Pacific and the Middle East, and “western markets”, which will cover the UK, Europe, and the Americas. This restructuring aligns with HSBC’s strategic efforts to manage geopolitical challenges, particularly the increasing tension between China and western nations.
Although headquartered in the UK, the bank generates the bulk of its profits from its Asian operations.
Elhedery stated that the overhaul would enhance service to customers and strengthen the group’s future success, with the changes scheduled to take effect on January 1.
HSBC also announced the appointment of Pam Kaur, its chief risk and compliance officer, as its new chief financial officer, replacing Elhedery, who was promoted earlier this year. Kaur will become the first female finance director in the bank’s 159-year history.
The restructuring will see Michael Roberts leading the “corporate and institutional banking” unit, overseeing commercial banking outside the UK and Hong Kong, as well as HSBC’s markets and investment banking businesses, marking a partial merger of two of its largest divisions.
Barry O’Byrne will head the “international wealth and premier banking” unit which will comprise HSBC’s premier banking businesses outside the UK and Hong Kong, as well as its private banking, asset management and insurance units.
David Liao and Surendra Rosha, the current co-CEOs of HSBC’s Hong Kong unit, will lead the newly established eastern markets division, while Ian Stuart will head the UK unit. The bank has not disclosed whether the restructuring will lead to job cuts, though reports in the Financial Times suggest a $300 million cost-cutting initiative could target senior bankers.
As part of the reorganisation, the bank will reduce its executive committee from 18 to 12 members, forming a new “operating committee”.
In am email to staff, reported by the Australian Financial Review, Mr Elhedery said Greg Guyett, who runs HSBC’s global banking and markets unit, will take on a new role as chair of a “strategic clients group” building relationships with the bank’s most important clients.
Colin Bell, who runs HSBC’s European operations, will leave the lender at the end of this year, as will Stephen Moss who runs its Middle East, north Africa and Turkey business.