HSBC is set to tone down its M&A and equity capital markets businesses in Europe, the United Kingdom, and the United States as part of its effort to overhaul its investment banking operations.
On Tuesday, an HSBC spokesperson said that the company intends to concentrate its M&A and equity capital markets expertise in Asia and the Middle East while gradually phasing out these activities in the UK, Europe, and the US. This is part of an effort to simplify the company and strengthen leadership in its area of expertise.
According to HSBC’s interim report, during 1H24, the company’s global investment banking segment generated $544 million, representing only 6.2% of the bank’s net income over the period.
The share of HSBC, listed on the London Stock Exchange, dipped by 0.16% at 11:50 AM London time.
The news came as CEO of HSBC Georges Elhedery, who has helmed the company since last year, set out on a cost-cutting campaign to overhaul the business.
In October, the bank revealed plans to consolidate its operations into four departments, divided between an Eastern markets division, reuniting Asia-Pacific and Middle East branches, and a Western markets division, comprising the non-ringed-fenced U.K., the continental Europe, and the Americas branches.
HSBC has reaped the benefits of higher interest rates. Meanwhile, after the European Central Bank continued its trend of easing its policy rate, the lender is now facing losses.
According to LSEG data, in 3Q24 the bank reported a pre-tax profit of $8.5 billion, topping analyst expectations of almost $8 million. The company also announced a $3 million share buyback.
The company is undergoing leadership transitions, with Pam Kaur stepping into the role of Chief Finance Officer as the first woman to hold this position at the bank. Additionally, Mark Tucker, the long-serving chair, is anticipated to vacate his role in 2026, as reported by Sky News.
