HSBC’s new chief executive, Georges Elhadry, has unveiled an overhaul of the bank, splitting it into four businesses and a new geographic setup in an effort to cut costs and navigate rising geopolitical tensions. I divide operations into East and West.
The bank also announced the promotion of its chief risk and compliance officer, Pam Kaur, to chief financial officer, the first woman to hold the role in HSBC’s 159-year history. A qualified Chartered Accountant, she joined as Head of Audit in 2013 and has nearly 40 years of experience working in UK, US and German banks.
Al-Hedri said the bank’s home markets of the UK and Hong Kong, corporate and institutional banking, and wealth and premier banking are its core strengths.
The UK and Hong Kong will be separate divisions and will carry two of the four businesses. Hong Kong will include personal and commercial banking under David Liao and Surendra Roche, while the new UK business under Ian Stuart comprises personal banking, including First Direct and M&S Bank, and commercial banking.
HSBC will consolidate its global commercial and institutional banking operations under Michael Roberts, and create a new international wealth and core banking business under Barry O’Byrne.
The bank, which is headquartered in London, is recruiting hundreds of staff to serve wealthy clients in the UK as it eyes a bigger slice of the wealth management market.
It currently has three main divisions: Commercial Banking, Global Banking and Markets, and Wealth and Personal Banking.
Under the new geographic setup, its Eastern Markets division will bring together Asia-Pacific and the Middle East, while its Western Markets division will include the UK, Rest of Europe and the US. The move comes amid rising tensions between China and the West.
Al-Hedri, who learned Mandarin during a six-month sabbatical two years ago, said: “The changes we are announcing today will make it easier for our colleagues to serve our customers and drive the group’s future success. The new structure will result in a simpler, more dynamic and agile organization.
“By making these changes, we can better focus on leadership and increasing market share in businesses that have a clear competitive advantage and the best opportunities for growth.”
The changes are designed to reduce duplication of process and decision-making, and will take effect on January 1. According to Bloomberg, HSBC has also cut jobs in some units and told bankers to cut back on travel and entertainment.
Chinese insurer Ping An, one of HSBC’s top shareholders, had been pushing in recent years to separate the Asian business from the rest of the bank’s operations, but investors rejected the proposal last year.