(March 25): HSBC Holdings plc expects to double down on investment banking operations in Asia and the Middle East after exiting key business in Europe and the US, chief executive officer Georges Elhedery said.

The bank will focus on debt and other financing activities in Asia as well as mergers and acquisitions and equity capital markets in the Middle East, Elhedery said in an exclusive Bloomberg TV interview on Tuesday at an HSBC conference in Hong Kong. The restructuring will save US$1.5 billion (RM6.7 billion) in efficiency cost and enable the bank to invest in areas where it has more competitive edge to generate “quality” revenue, 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 stand-alone businesses. He shuttered most of its mergers and acquisition and equity underwriting operations in the US, UK and continental Europe.

“The exit that we are processing now in Europe and the Americas is to allow us to focus at the areas where we can really be differentiating to our customers,” said Elhedery. 

The restructuring has been endorsed by top shareholder Ping An Insurance (Group) Co, which last week said it’s “very happy” with the direction, marking a dramatic shift in tone from its combative stance during a dispute with HSBC back in 2022.

Shares of the London-based lender have rallied almost 30% in Hong Kong since Elhedery took over on Sept 2. 

The CEO 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. 

HSBC asked hundreds of managers to reapply for jobs in the firm’s newly formed corporate and institutional banking division. Several top executives, including Nuno Matos — who ran wealth and personal banking and was Elhedery’s main rival for the CEO role — have also exited. 

HSBC will incur US$1.8 billion in mostly severance costs, and most of the decisions will take place in the first half of the year, said Elhedery. 

He said that it’s “inevitable” that some, mostly senior roles, will be lost in a simplification process, but that the bank wants to retain talent and “reward them competitively”.

Hong Kong is the “heart of HSBC” and the bank will keep investing in the city, said Elhedery. 

The UK-headquartered bank opened its doors in the former British colony 160 years ago to help finance trade between Europe and Asia. 

Elevating Hong Kong as a stand-alone market gives more autonomy to act faster, according to Maggie Ng, HSBC’s head of wealth and personal banking for Hong Kong. 

The special administrative region accounted for US$9.1 billion, or roughly 28% of HSBC’s pre-tax profits in 2024, according to re-presented results. 

The bank is looking to expand its headcount as well as branches, after it acquired 800,000 new customers last year, driven by an influx from mainland China, Ng said in a separate Bloomberg TV interview. 

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