HSBC Holdings has decided to change its organisational structure into four businesses as the London-headquartered bank looks to save costs under its new group chief executive officer (CEO) Georges Elhedery.
From January 1, 2025, the company will operate through four businesses: Hong Kong; the UK; corporate and institutional banking; and international wealth and premier banking.
Last year the bank resisted pressure to extract its Asia unit from shareholder Ping An, a Chinese insurance giant.
The bank said that the changes will reduce the duplication of processes and decision making in the current structure and will result in "greater alignment and agility in serving customers". The group’s functions will be realigned to support the four new businesses, an announcement to the Hong Kong Stock Exchange (HKEX) said on October 22.
The new ‘Hong Kong business’ will comprise personal banking and commercial banking under the business oversight of David Liao and Surendra Rosha, co-CEOs Asia Pacific (Apac) at the group operating committee, for both HSBC as well as Hang Seng Bank. As part of the new organisational structure, Eastern markets will bring together the Apac and the Middle East region (MENAT) and will be overseen by Liao and Rosha.
The new UK business, will comprise UK personal banking, including First Direct and M&S Bank and UK commercial banking, including innovation banking, under the sole business oversight of Ian Stuart, HSBC's UK CEO.
The corporate and institutional banking business includes global wholesale banking, such as cross-border transaction banking, and capital markets. This will include the integration of its commercial banking, outside of the UK and Hong Kong, with its global banking and markets business which inludes Western markets, including its non ring-fenced UK bank, Europe and the America, predemoninatly a wholesale banking region.
Michael Roberts, CEO HSBC USA and Americas, will lead corporate and institutional banking and Western markets.
The international wealth and premier banking group, which is strong in Asia and the Middle East, will bring together its Premier banking focussed businesses outside of Hong Kong and the UK, its global private bank, and its asset management and insurance arms. Barry O’Byrne, CEO wealth and personal banking, will lead international wealth and premier banking.
Western markets will comprise the non-ring-fenced bank in the UK, its continental European business and the Americas and will be overseen by Michael Roberts.
In addition, the group executive committee of 18 members will be replaced by a new group operating committee comprised of 12 members. The group OpCo will serve as the leading decision-making executive committee of the firm. These changes will be effective from January 1, 2025.
Further details of the changes, including potential cost savings and jobs losses, will be announced alongside the 2024 full year results in February 2025.
A HSBC spokesperson told FinanceAsia that Colin Bell, HSBC’s head of European operations, and Stephen Moss, HSBC’s head of the Middle East, North Africa and Turkey, have "both decided to step down" from their roles and will leave the bank at the end of the year.
In the announcement Elhedery commented: “The changes that we are announcing today [October 22] 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 as we focus on executing against our strategic priorities, which remain unchanged.”
Elhedery added: “I’m excited about the opportunities ahead of us and firmly believe that this structure sets us up to deliver the next phase of growth. Our home markets of the UK and Hong Kong, together with our corporate and institutional banking as well as our wealth and Premier banking businesses, are the core strengths of HSBC. 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."
New CFO
In another announcement on October 22, the bank has appointed Pam Kaur as group chief financial officer (GCFO) and an executive director of the board of directors effective January 1, 2025.
Kaur, who becomes the group's first woman GCFO, joined the group in April 2013 as group head of audit, is currently group chief risk and compliance officer (GCRCO). She is a highly experienced financial services executive with almost 40 years’ experience having worked in the UK and the US for British, American and German banks.
Jon Bingham, interim GCFO, will resume his role of global financial controller.
Mark Tucker, HSBC group chairman, said: “I would like to congratulate Pam on her appointment as GCFO. She is highly respected and well known to the board and was the unanimous choice. I wish Pam every success in her new role and thank Jon for his excellent support as interim GCFO.”
HSBC said it will provide an update on Kaur’s successor as GCRCO in "due course". Elhedery previously performed the GCFO role before being promoted earlier this year to group CEO, starting in September.
