HSBC announced its biggest restructuring in a decade this morning, splitting itself into four divisions, combining some of its commercial and investment banking operations and reshuffling management.
The changes come as Europe’s largest lender looks to cut costs and navigate a diplomatic minefield between China and the West.
The bank will make its British and Hong Kong banking units into two stand-alone entities. Commercial banking outside Britain and Hong Kong, and the markets and investment banking business will be part of a new commercial and corporate and institutional banking unit. An international wealth and premier banking division will group the private banking, asset management and insurance businesses. HSBC will also create an Eastern regional division that will pair its Asia Pacific and Middle East operations. Europe, Britain and the Americas will be grouped in another.
Pam Kaur, the chief risk and compliance officer, will become the chief financial officer. Ms. Kaur, who joined the bank in 2013, will be the first woman to hold that role at HSBC.
With rates under pressure, banks are scrambling to cut costs. HSBC reported better-than-expected second quarter results, but some analysts worry that the lender is exposed to big rate cuts by the Federal Reserve and others.
HSBC is also at the front line of trade tensions between the West and China. The bank is listed in London but makes most of its money in Asia. It was caught in the crossfire during the pro-democracy protests in Hong Kong in 2019. Last year, investors rejected a plan backed by Ping An, a Chinese insurer and one of HSBC’s biggest shareholders, for the bank to separate its Asia operations.
Investors shrugged off the latest changes. HSBC’s shares are up almost 10 percent over the past year but barely moved this morning. That’s partly because details weren’t revealed on how many roles would go and how much money would be saved. Some analysts want to know what other parts of the group could be cut next.
The post HSBC Overhauls Bank, Seeking to Balance China and the West appeared first on New York Times.
