João Araújo’s Post

HSBC Considers Merging Commercial and Investment Banking Divisions HSBC's new CEO, Georges Elhedery, is considering combining the bank's commercial and investment banking divisions as part of his strategy to streamline operations and reduce costs. This potential restructuring could have significant implications for the banking industry. Key facts: - The combined division would become HSBC's largest revenue generator, contributing around $40 billion annually. - The merger would bring together a workforce of over 90,000 employees. - In 2023, the commercial banking division posted a profit before tax of $13.3 billion, while the global banking and markets arm brought in $5.9 billion. - This move follows similar restructuring efforts by competitors like JPMorgan, which combined its commercial and investment banking divisions earlier this year. - Elhedery's focus on cost reduction comes as central banks worldwide begin to cut interest rates, potentially impacting the margins of global lenders. The potential merger of HSBC's commercial and investment banking divisions raises an important question for incumbent banks: In an increasingly competitive and evolving financial landscape, how can banks effectively restructure their operations to optimise efficiency, reduce costs, and maintain a competitive edge? As the industry continues to face challenges such as changing interest rates and the need for digital transformation, banks must carefully consider their organisational structures and strategies to remain agile and adaptable. HSBC's potential move highlights the importance of continuously evaluating and adjusting business models to meet the demands of the modern banking environment. Source: Bloomberg #hsbc #digitaltransformation #restructuring #banking

HSBC’s new CEO, Georges Elhedery, unveiled a restructuring plan aimed at simplifying the bank’s operations, reducing the number of divisions, and cutting upper management. This comes as HSBC grapples with lower interest rates affecting its income. Restructuring is a challenging decision, and for HSBC, it could mean either revitalisation or a struggle to maintain its competitive position. From my perspective, HSBC’s move is a great example of adapting organisational structure to financial realities—a skill I hope to use in my future career in finance. If HSBC’s approach proves effective, it may set a trend for other banks facing similar pressures. It will be interesting to see if more institutions streamline divisions and reduce management as a response to financial challenges. Read more:

One of the most ambitious wealth projects by #HSBC in China under its “pivot to Asia” strategy, is being challenged internally at a time when China’s economic growth slowed with HSBC’s new helmsman vowing to adhere to strong cost discipline. The bank is reviewing expenses and operational controls at its China digital wealth business Pinnacle, in a move that could result in layoffs and mark an abrupt reversal of the lender's ambition for the unit, several sources said. As part of the review, the lender is looking at staff salary structures and probing whether suppliers inflated expenses, contributing to a sharp spike in costs that outpaced revenues. A downsizing of Pinnacle, which was launched in 2020 and sells insurance and fund products, would be a setback for Europe's largest lender by assets, which has doubled down on Asia while divesting from less-profitable businesses elsewhere. w/ Engen Tham Sumeet Chatterjee and edited by Paritosh Bansal #reuters #georgeselhedery #wealthmanagement #wpb #china #insurance #review #probe #expenses #exclusive

HSBC Holdings has launched a major restructuring initiative under CEO Georges Elhedery to streamline its operations and improve overall efficiency. The bank has instructed hundreds of managers to reapply for positions in its newly created #corporate and institutional #banking division. This restructuring process, which is currently underway, is expected to result in the dismissal of several hundred senior bankers and managing directors. https://lnkd.in/gX5GtYp9

HSBC is shaking things up, asking senior managers to reapply for roles in its newly combined Corporate and Institutional Banking division as part of the CEO's drive to simplify operations. The restructuring merges teams from commercial banking and global banking, while replacing general manager titles with the more widely recognized managing director rank. With a focus on cost-cutting and profits under pressure, the bank plans to finalize its new structure by February. Despite efforts like $35 billion in share buybacks, HSBC's performance continues to lag behind competitors, and this is an effort to make the bank's operations more efficient and competitive. #HR #HumanResources #HSBC #BankingNews #CorporateRestructuring #FinancialServices #LeadershipChanges

“Europe’s largest lender will no longer provide equity underwriting and advisory services outside of its core operations in Asia and the Middle East, according to a memo seen by Bloomberg News. (…) The bank, however, will complete any live deals and mandates, the memo said. HSBC will offer special incentives to keep those staff motivated as those roles will end once the current work is wrapped up, a person familiar with the situation said, asking not to be identified discussing private information. (…) Final numbers for job losses haven’t been decided yet, and some staff will be redeployed to Asia and the Middle East where the bank will be bolstering its position, the person said. Executives hope the revamp will help them shave off at least $3 billion in expenses, Bloomberg News reported previously. That would represent a roughly 10% cut in the bank’s expense bill, which is estimated to be around $32.6 billion for the year.”

🚨 BREAKING: HSBC Announces Major Overhaul, Splitting into Four Divisions Starting January 1, 2025, HSBC will streamline its operations into four key business areas and create a new geographic set-up separating east from west, to cut costs and navigate geopolitical tensions. The four key business areas: ▶ Hong Kong – Personal and Commercial Banking in HSBC's home market. ▶ UK – Personal and Commercial Banking, including First Direct and M&S Bank. ▶ Corporate & Institutional Banking – A new division combining Commercial Banking (outside the UK and Hong Kong) with Global Banking & Markets. ▶ International Wealth & Premier Banking – Focused on wealth growth, especially in Asia and the Middle East. According to CEO Georges Elhedery, this move will create a more agile, customer-focused organisation, enabling HSBC to better capitalise on growth opportunities while simplifying decision-making. The aim is to unlock the bank’s full potential, enhance customer service, and drive success in its strongest markets, including the UK and Hong Kong. A new, smaller Group Operating Committee will lead these changes, reducing duplication and improving efficiency across the business. Pam Kaur, currently group chief risk and compliance officer will assume the CFO post on Jan. 1 — the lender’s first female finance chief. More details are expected with HSBC's 2024 full-year results. #HSBC #Banking #Finance

For HSBC, a move like this could be aimed at increasing profitability and streamlining operations, especially as they face pressure from investors to improve their returns. The shift might also reflect the challenges of investment banking in a high-risk, low-margin environment, especially after the pandemic and amid economic uncertainty. On the flip side, such a retrenchment can also have broader implications for the industry, with potential job losses, reduced competition, and shifting talent. It might also push more customers toward smaller, more nimble fintech firms or non-traditional financial players, adding another layer of disruption to the industry.

🚨 **Big Moves in Banking: HSBC Reshapes Its Workforce Strategy** 🚨 In a bold move to streamline operations, HSBC is reportedly asking hundreds of managers to reapply for their roles as part of a significant restructuring effort. This shift reflects the bank’s focus on agility and efficiency in an ever-evolving global financial landscape. Such changes highlight the growing trend of organizations rethinking traditional workforce structures to remain competitive. While this may be a challenging transition for employees, it also underscores the importance of adaptability and upskilling in today’s professional environment. **What does this mean for the future of banking?** 🌍   - A sharper focus on lean, efficient management.   - Greater emphasis on innovation and digitization.   - Opportunities for new talent to rise and reshape the organization.  As we witness yet another major institution navigating transformation, it’s a reminder for all industries to stay future-ready. What are your thoughts on these changes? Is this the future of corporate leadership?  #Banking #Leadership #FutureOfWork #HSBC #Restructuring https://lnkd.in/g3H227W2