HSBC Shifts Investment Banking in Asia & the ME

As CEO Georges Elhedery explained to Bloomberg Television, HSBC Holdings will increase its investment banking activity in Asia and the Middle East after pulling back from North America and Europe. Elhedery, who stepped into the top spot in September, said HSBC is redirecting US$1.5 billion in "cost savings" into higher growth regions. He stated that it includes a significant investment in strengthening debt and financing capabilities around the globe while further establishing its presence in the equity capital markets and M&A advisory in the Middle East.

The move followed a more general reset of the organization's structure done under Elhedery’s direction, including the merging of commercial banking with investment banking, the establishment of the UK and Hong Kong operations as independent entities, and scaling back on equity and M&A businesses in and around Western markets. HSBC expects to incur restructuring charges of approximately US$1.8 billion over the next two years, much of which is related to severance, and most decisions have been made.

They have reduced the senior management ranks, taking the number of their key operating teams from 18 to 12, and with some investment bankers already on short-term contracts. Their top shareholder Ping An Insurance has given their support to these changes, which is a stark contrast from their much more combative stance in 2022. HSBC shares in Hong Kong have gained roughly 30% since Elhedery took over.