HSBC plots $3bn cost savings in new chief’s restructuring
HSBC is reportedly hoping to realise at least $3bn of cost savings as part of its biggest restructuring in a decade under new chief executive Georges Elhedery.
Europe’s biggest lender aims to complete its revamp by next June, Bloomberg News reported. The overhaul will see the London-based lender reorganise into four new divisions and split its businesses into Eastern and Western geographical camps.
It will also involve job cuts among senior bankers, which Bloomberg reported are expected to mean just over 40 per cent of HSBC’s top 175 managers being axed.
Morning Wire approached HSBC for comment.
Elhedery, who replaced Noel Quinn as CEO in September, has quickly made his mark with sweeping changes designed to streamline the bank’s sprawling operations and rein in costs.
It comes as rate cuts by central banks have started to squeeze profit margins at big lenders after a period of record-breaking earnings last year.
Achieving $3bn in cost reductions would shave some 10 per cent off Asia-focused HSBC’s expense bill, which analysts predict will come in at around $32.6bn this year.
Elhedery’s tenure as CEO has already seen a string of senior executives leave the bank, including global private banking and wealth chief Annabel Spring, group sustainability officer Celine Herweijer, Middle East head Stephen Moss, European boss Colin Bell and Nuno Matos.
Matos, formerly CEO of HSBC’s wealth and personal banking business, was considered Elhedery’s main rival to lead the group as a whole. On Monday, he was appointed as CEO of Australia’s second-biggest bank ANZ.
HSBC has said it will provide more details on its restructuring plans, including their financial impact, alongside its annual results in February.