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HSBC On Tuesday, it unveiled a new geographical setup and consolidated its operations into four business units, amid a comprehensive overhaul that led to the emergence of the bank's first female chief financial officer.
The bank's shares were stable in early trading in London on Tuesday. UK-listed shares have risen more than 6% year to date.
As part of the restructuring outlined in regulatory filings to the Hong Kong Stock Exchange, HSBC plans to split its operations between the “Eastern Markets” branch, reuniting the Asia-Pacific and Middle East regions, along with the “Western Markets” division, which includes non-banking branches. – UK ring-fenced bank, business in continental Europe and the Americas.
Chinese insurer Ping An, which is HSBC's largest shareholder with a stake of more than 9%, had previously campaigned for HSBC's Asian business to be separated from the rest of the group's operations – although this was ultimately rejected during the bank's annual general meeting last year.
The bank on Tuesday also announced plans to streamline its business in a bid to “reduce duplication of processes and decision-making.” From January, it will operate through four divisions: Hong Kong, UK, International Wealth and Lead Banking, and Corporate and Institutional Banking.
“The new structure will lead to a simpler, more dynamic and flexible organization as we focus on executing on our strategic priorities, which remain unchanged,” Al-Hudayri said on Tuesday in a statement, adding that the change will help propel HSBC into its “next phase.” Growth stage.”
The bank's new corporate and institutional banking unit will combine its commercial banking businesses (outside Hong Kong and the UK), global markets banking and wholesale banking operations in Western markets.
UBS analysts said the extent of the restructuring required is “unknown and significant” at the moment.
“Aligning missions for a group of 213,978 employees involves extraordinary costs, and divisional transformation provides the opportunity to reduce costs for the new CEO,” they wrote in a note Tuesday titled “Simpler, Faster, Better?”
“It is also important whether this structure will lead to other changes: for example, (1) Where does Australian retail (65% of loans are (residential) mortgages) fit into this structure? (2) Is insurance manufacturing key International wealth? and (3) Does HSBC need a greater corporate presence in Latin America?
Change at the top
Like many European lenders, HSBC has benefited from a higher interest rate environment since the Covid-19 pandemic, but now faces losing that support after the European Central Bank began easing monetary policy in June.
Last July, HSBC reported pre-tax profits of $21.56 billion in the first half of the year, announcing a share buyback program of up to $3 billion. The bank is scheduled to announce its financial results on October 29.
Earlier this month, the Financial Times reported that Al-Hudayri was targeting the bank's senior management as part of cost-cutting restructuring plans that could save up to $300 million.
Amid the management overhaul announced on Tuesday, HSBC said Pam Corr – currently group chief risk and compliance officer – will take over as CFO on January 1, succeeding interim CFO John Bingham.
This is the second major leadership change for HSBC in recent months, following the appointment of former CFO George Al Hadiri as group CEO in July.
