HSBC unveils sweeping overhaul in bid to simplify corporate structure

Investing.com — London-listed shares in HSBC (LON:HSBA) were little changed on Tuesday as investors parsed through the bank’s new plans to carry out a sweeping overhaul of its corporate structure.

Chief Executive George Elhedery announced that the lender will now be split between four businesses with “clear lines of responsibility.” The shake-up will see HSBC divide on a regional basis between Hong Kong and the UK, while new units focused on “corporate and institutional banking” as well as “international wealth and premier banking” are set to be established.

HSBC’s current operations, which were set up in the wake of the 2007 – 2008 financial crisis, include “wealth and personal banking”, “commercial banking”, “global banking and markets” and a corporate center.

In a regulatory filing, HSBC said the move will reduce “the duplication of processes and decision making”, resulting in “greater alignment and agility in serving our customers.”

“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,” Elhedery said.

The overhaul comes at a time when the bank, which is based in the UK but relies heavily on its Asian operations for income, is attempting to navigate tensions between China and Western countries. HSBC has also faced pressure from Chinese insurer and key investor Ping An to separate its business in Asia from the rest of the group, although the call has died down somewhat after shareholders rejected the plan last year.

In a note to clients, analysts at UBS flagged that the “magnitude of any required restructuring charges” surrounding the changes is currently “unknown.” HSBC is expected defer giving any details on this question until it reports its full-year 2024 results, the analysts added.

HSBC is due to release its third-quarter returns on Oct. 29.

Meanwhile, HSBC said it had appointed Pam Kaur as Group Chief Financial Officer. Kaur, who is current Group Chief Risk and Compliance Officer, has almost four decades of experience working for British, American and German banks.