HSBC will make a second effort to combine its Commercial Banking Division with its Global Banking and Markets Unit in a shakeup that could result in hundreds of job cuts among long-serving senior employees.
The bank declined to comment on an article that claimed it was hoping to save up to $300 million by merging the divisions. The bank last tried a partial merger in 2020, but the plan was halted due to the Covid-19 pandemic.
Georges Elhedery is being pressed to find savings in Europe’s largest bank. Its shares have been significantly behind peers over the last nine months.
According to news, the first outlet that broke the story, preparations are well underway. An announcement is expected by the end of the month. It was also noted that the uncertainty was impacting staff morale.
HSBC has 214,000 employees in over 200 countries. It is the largest lender in the world. It reported profits of $21.6billion for the first half 2024. This is a slight decrease. Today, it’s worth £122billion.
According to a source, “[the merger] will reduce top management layers.” It will affect senior staff and certain larger roles and it’s the costliest layer. The merger will eliminate many senior positions, since each HSBC country will only need one set of senior divisional executive officers instead of two.
The cost of commercial banking rose by 12 percent last year, to $3.9 billion. Global banking and markets grew 3 percent to $4.9 billion. This division includes some the highest-paid investment bankers and dealmakers.
Elhedery has already restructured his team since taking over Noel Quinn’s position. He announced the departure of Nuno Mattos as head of wealth management and personal banking next year, who was seen as a competitor for the top post.
HSBC has been hit by concerns about China’s economic growth. HSBC’s shares have only risen 6.5% year-to-date, compared to 24.5% at JP Morgan Chase. 30.5% at Goldman Sachs. 50.5% at Barclays.
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