(Bloomberg) – HSBC Holdings PLC expects to double its investment banking operations in Asia and the Middle East after withdrawing major businesses in Europe and the US.
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The bank will focus on Asian debt and other financing activities, Middle Eastern mergers, acquisitions and equity capital markets, Elhedaly said in an exclusive Bloomberg Television interview at the HSBC conference held in Hong Kong on Tuesday. The restructuring saves $1.5 billion in efficiency costs and allows banks to invest in areas with a more competitive edge to generate “quality” revenue, he said.
At the helm about six months ago, Elhedery unleashed a drastic overhaul at the bank, leading to an exit for several senior executives. He combined commercial banking and investment banking units to operate in standalone businesses in the UK and Hong Kong. He has closed most of his mergers, acquisitions and stock underwriting operations in the US, UK and continental Europe.
“The exit we're dealing with in Europe and America now is to ensure we can focus on areas where we can really differentiate ourselves from our customers,” Elhedery said.
The restructuring last week said it was “very happy” in that direction, marking a dramatic change in tone from its 2022 combat stance in conflict with HSBC.
The London-based lender's shares have raised almost 30% in Hong Kong since Elhedery took over on September 2nd.
Rewarding
Hong Kong is “the heart of HSBC” and banks will continue to invest in the city, Elhedaly said.
CEOs have removed the management tier from the top-down, focusing on cutting employment across banks across banks, and may even place investment bankers in short-term work arrangements.
HSBC will bear $1.8 billion in retirement costs, with most decisions coming in early in the year, Elhedery said.
He said it was “inevitable” that some senior roles will be lost in the simplification process, but that the banks want to remain talented and “competitive rewards.”
