Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
HSBC has renamed its “eastern markets” and “western markets” business sections, within months of creating them, after the branding prompted renewed speculation that the bank might formally split along east-west lines.
The bank is now calling the eastern markets business “Asia and the Middle East” and the western markets business “Europe and Americas”, two people with knowledge of the matter said. It is not changing the structure itself.
The “eastern” and “western” sections were created as part of a wide-ranging overhaul that HSBC’s chief executive Georges Elhedery announced in October, within weeks of starting the role.
The bank had previously divided its global footprint into five regions, and Elhedery said that reducing this to two was a “simplification of the bank”.
But the move fuelled speculation that the overhaul along east-west lines was laying the groundwork for a future split. Top HSBC shareholder Ping An, a Chinese insurance group, in 2023 pressured the bank to spin off its Asian operations — a proposal that was shot down in a shareholder vote that year.
Elhedery was forced to deny the idea the bank was moving towards dividing its business, saying in October that the overhaul was “not either a precursor, or intention, or preparation for any split”.
Some staff had also raised concerns that the sweeping “eastern” and “western” labels were inappropriate, especially at a time of rising geopolitical tension, one of the people said.
HSBC declined to comment beyond pointing to a statement from Elhedery in October, in which he said the bank would “streamline our geographic governance structures, reducing them from five regions to two, further enhancing our ability to serve our customers’ needs throughout our global network.”
The “eastern markets” section covers the Asia Pacific region and the Middle East, and is overseen by David Liao and Surendra Rosha. The “western markets” section covers HSBC’s non-ringfenced UK bank, as well as Europe and the Americas.
The simplified geographical division was introduced alongside the creation of four new business lines: Hong Kong, the UK, corporate and institutional banking and international wealth and premier banking.
Last month, HSBC unveiled a goal of saving $300mn in 2025 and cutting $1.5bn from its annual cost base by the end of next year, as it detailed the impact of the overhaul for the first time.
The lender is also closing key parts of its investment banking operation — mergers and acquisitions advisory work, and its equity capital markets business — in the west.
The overhaul “elevates and empowers” key areas of the bank such as its UK and Hong Kong units and its wealth business, Elhedery said last month, adding that it had “eliminated large parts of our complex matrix governance structure”.
Read the full article here
