- HSBC is merging its commercial and institutional banking operations and creating a new international wealth and premier banking division.
- It’s simplifying its geographic structure with the creation of Eastern markets and Western markets divisions.
- HSBC also announced the appointment of Pam Kaur as its new chief financial officer
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’The new CEO Georges Elhedery has moved swiftly to put his own corporate stamp on HSBC, with a restructuring drive which focuses on elevating the growth levers in the business. Second quarter revenues got a significant boost from the fees generated in its wealth business, so creating a new division to focus on high and ultra net worth accounts is aimed at capitalising on further potential that this area of the business promises.
HSBC is long been on an Asian pivot, but it’s not gone far enough for a section of the investor base, who have wanted to see the business spin out its Asian operations. This has been repeatedly rebuffed, and with Mr Eldhedery maintaining that the bank’s strategic priorities remain unchanged, splitting its operations into Eastern markets and Western markets division does not seem to indicate that a hiving off is on the cards. Instead, cost-cutting is a big driver of these changes, with fresh efficiencies likely through the simplification of its geographical structures and the merger of its commercial and institutional banking operations. Pam Kaur is likely to be seen as a safe pair of hands as the new Group CFO, given she’s been at the bank for more than a decade in numerous financial leadership roles.
Shareholder reaction to these moves has been muted, with a shift in focus on wealth management largely expected, and the restructure of the senior management team not ruffling any feathers. Given the bank’s big Asia focus, China’s economy is still a concern. There are ongoing challenges in in the Chinese commercial real estate market, and although management has indicated the worst has come and gone, concerns are still lingering about how far the planned stimulus form authorities will really move the dial on sentiment.’’
