HSBC’s new chief executive, Georges Elhedery, has unveiled an overhaul of the bank, dividing it into four businesses and a new geographical setup that splits operations into east and west in an effort to cut costs and navigate rising geopolitical tensions.
The bank also announced the promotion of its chief risk and compliance officer, Pam Kaur, to chief financial officer, the first woman to occupy the role in HSBC’s 159-year history. A qualified chartered accountant, she joined as head of audit in 2013 and has almost 40 years’ experience working for UK, US and German banks.
Elhedery said the bank’s home markets of the UK and Hong Kong, corporate and institutional banking, and wealth and premier banking were its core strengths.
The UK and Hong Kong will be standalone divisions and make up two of the four businesses. Hong Kong will include personal and commercial banking under David Liao and Surendra Rosh, while the new UK business run by Ian Stuart comprises personal banking, including First Direct and M&S Bank, and commercial banking.
HSBC will combine its global commercial and institutional banking operations under Michael Roberts, and create a new international wealth and premier banking business under Barry O’Byrne.
The bank, which has it’s headquarters in London, has been on a hiring spree to recruit hundreds of staff to serve rich clients in the UK as it eyes a larger slice of the wealth management market.
It currently has three main divisions: commercial banking, global banking and markets, and wealth and personal banking.
Under the new geographical setup, its eastern markets division will bring together Asia Pacific and the Middle East, while the western markets division will comprise the UK, the rest of Europe and the Americas. The move comes at a time of growing tensions between China and the west.
Elhedery, who learned Mandarin during a six-month sabbatical two years ago, said: “The changes that we are announcing today will make it easier for our colleagues to serve our customers and drive the future success of the group. The new structure will result in a simpler, more dynamic and agile organisation.
“By making these changes, we can better focus on increasing leadership and market share in those businesses which have clear competitive advantage and the greatest opportunities to grow.”
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The changes are designed to reduce duplication of processes and decision making, and take effect on 1 January. HSBC has also paused hiring in some units and told bankers to cut back on travel and entertainment, according to Bloomberg.
The Chinese insurer Ping An, one of HSBC’s top shareholders, had been pushing for a separation of the Asian business from the rest of the bank’s operations in recent years, but investors rejected the proposal last year.