HSBC is reportedly considering a cost-cutting plan that could save up to $300m, primarily by targeting its senior bankers layer.
The restructuring, led by HSBC CEO Georges Elhedery, is expected to focus on merging the bank’s commercial banking division with its global banking and markets unit, reported the Financial Times by citing undisclosed sources privy to the matter.
Elhedery’s first major move to reduce costs since taking over as CEO in September, aims to streamline operations at the senior level.
Although details are yet to be disclosed to staff, an official announcement is anticipated by the end of this month. The savings target may be adjusted as the bank continues to evaluate the restructuring.
The restructuring aims to eliminate duplication among the leadership of the bank with a strong workforce of 214,000. The expected savings from the new strategy represent just 1% of HSBC’s $32bn total costs for last year.
According to the publication, HSBC Asia-Pacific business’ current co-chief executive Surendra Rosha is being considered to oversee the commercial and global banking divisions. It also stated that HSBC markets and securities services global head Patrick George may take charge of the markets business.
HSBC commercial banking head Barry O’Byrne was shifted to lead the wealth and personal banking division, while Greg Guyett has been heading global banking and markets since October 2022.
In addition to the cost-cutting measures, HSBC is also searching for a new chief financial officer to replace Elhedery, Pam Kaur, the bank’s current chief risk and compliance officer, is reportedly considered a frontrunner for the role.
In the first half of this year, expenses in the commercial banking unit increased by 12% to $3.9bn, while costs in the global banking and markets unit rose by 3% to $4.9bn.
HSBC, in the recent years, divested various businesses in Western markets including the US, France, and Canada to focus on Asia where it has the most scale. Last month, the bank agreed to sell its private banking operations in Germany to BNP Paribas.
Last week, HSBC and Tradeshift launched a new, jointly owned business, dubbed SemFi by HSBC, to focus on the development of embedded finance solutions and financial services apps.
