HSBC Holdings’ new CEO, Georges Elhedery, has introduced the most extensive restructuring of the bank in over a decade, aimed at streamlining operations and addressing cost pressures.
The plan merges HSBC’s global commercial and institutional banking operations and establishes a new international wealth and premier banking division.
In addition, the bank is reorganising its regional structure, splitting its operations into two primary units: one focused on Asia-Pacific and the Middle East, and the other covering the UK, Europe, and the Americas.
Hong Kong and the UK will now operate as standalone entities, granting local managers more control over these key profit centers.
While the overhaul marks a significant shift, the plan has left many employees concerned about their roles within the new structure, according to a report by Bloomberg.
Investors, meanwhile, are still waiting for details on potential job cuts and the anticipated cost savings that could result from the changes.
Elhedery has stated that more specific information, including financial impacts, will not be disclosed until HSBC’s full-year results are published in February.
Since taking over in September, Elhedery has moved quickly, implementing senior management changes, initiating asset sales in several markets, and securing a major brand partnership as part of his broader strategy to simplify the bank’s structure in a highly competitive market.
Despite these moves, uncertainty remains about how the restructuring will affect HSBC’s businesses in specific markets such as Mexico and Australia, which were not mentioned in the announcement.
Analysts have noted that the financial implications of the changes, including potential restructuring costs, are unclear.
Some expect more updates during the bank’s third-quarter earnings release later this month, though full clarity may not come until February.
Previously, HSBC resisted calls from its largest shareholder, Ping An Insurance Group, to consider splitting off its Asian operations.
While the new structure gives the Asian business more control, it falls short of the complete separation that was proposed.
Featured image credit: HSBC