HSBC Holdings new chief executive Georges Elhedery is reportedly planning to restructure Europe’ largest lender in an effort to save $300 million, the Financial Times reported on Thursday, citing informed sources.
According to one source, the restructuring is set to “affect senior people and some of the larger roles” as that it “where the costs are.”
The measures could include merging HSBC’s commercial banking unit with its global banking and markets unit. It was reported that the Asia-focused lender is considering putting Surendra Rosha, co-chief executive of its Asia-Pacific business, in charge of commercial and global banking and Patrick George, global head of markets and securities services, in charge of the markets business.
The preparations for the restructuring are said to be at an advanced stage and the staff are expected to be informed about the move by the end of October. HSBC, which currently employs 214,000 people, is due to report its third-quarter results on October 29.
The banking giant has enjoyed a massive earnings tailwind from higher interest rates in recent years, reporting a record a pretax profit of $30.3bn in 2023, up from $17.1 billion the year before. Profit after tax increased by $8.3 billion, to $24.6 billion, while revenue rose by 30 percent to $66.1 billion.
“While Elhedery’s vision could be see a disruptive restructuring, savings of $300m would only amount to a fraction of HSBC’s reported costs of $16.3bn in the first six months of 2024, which were up five per cent year on year” City AM wrote.
According to analysts the London-based bank must reduce costs by around $2bn over the coming years to maintain its current efficiency ratio, a key measure of profitability.
Elhedery was appointed Group Chief Executive from 2 September 2024. He most recently served as Group Chief Financial Officer from January 2023 until September 2024.
