Is HSBC turning its back on Europe?
When Georges Elhedery took the helm at HSBC, he wasted no time making his mark on the firm.
Elhedery plotted a “simpler, more dynamic and agile organisation” in his sweeping restructure first announced in October 2024.
One significant change introduced by the new bank chief was splitting the business into “eastern markets” covering the Asia-pacific and the Middle East and “western” with the Americas and Europe.
But recent manoeuvres point to a slow withdrawal from European operations.
The latest retreat included the bank chopping 348 positions in France, representing approximately 10 per cent of its work force in the country.
The move follows HSBC selling its retail banking business in France to CCF – a subsidiary of My Money Group.
Other parts of the world have also been ripe for the chop. HSBC sold its Canadian unit to the Royal Bank of Canada for $9.96bn.
William Howlett, financials analyst at Quilter Cheviot, told Morning Wire: “We would see the news that HSBC is cutting workforce in France as a continuation of the bank’s strategic pivot to Asia which has been intensifying over the past decade.”
Earlier this month, HSBC cancelled its 2025 UK Corporate and Investor Conference – a central event in the bank’s calendar uniting UK business leaders, analysts and investors.
The lender has also made any indication if the event will return in 2026.
Amid Elhedery’s commitment to cut £1.2bn in costs by the end of 2026, investment bankers came under fire.
HSBC sent out a memo in January, obtained by the Financial Times, which issued plans to shut key parts of its investment banking business in the UK, Europe and the Americas.
This followed the bank’s interim report revealing investment banking revenues were down 3 per cent for the first half of 2024, compared to the year previous.
Morning Wire revealed in February that investment bankers were set to face the chop the same day pencilled in for bonuses.
Howlett said: “The bank has been continually restructuring by exiting markets where it is sub-scale” citing withdrawals in Canada, Argentina and France.
He said Elhedery had “refined” his strategy by “emphasising operational efficiency” and “a deeper commitment to Asia”.
Elhedery slammed ‘disappointing’ European growth
The common theme behind HSBC’s realignment comes to a simple reason – growth.
The firm booked $34.1bn (£25.7bn) in pre-tax profit for 2024 after a strong performance in its Asian operations.
In his letter to shareholders, Elhedery said: “In the West, the US remained an outperformer, while growth across Europe was disappointing.
“In Asia and the Middle East, there was broadly steady growth.”
HSBC reported a $75bn increase in customer accounts, on a constant currency basis, and cited growth “primarily in Asia”.
Gary Greenwood, equity analyst at Shore Capital, told Morning Wire: “[Elhedery] is very focused on driving through operational and capital efficiency improvements to help sustain return on equity in what is likely to be a declining interest rate environment.”
He added: “The pivot to Asia, where growth and returns are more attractive, has been ongoing for a while so this is really just a continuation of a strategic trend.”
But the lender has rebuked accusations of abandoning its European operations.
In a statement released on Wednesday, HSBC said it would continue to “support its international clients and to position Europe as an essential part of its strategy, notably given its commercial dynamic and its key role in international corridors.”
The firm said: “Developments reflect in France the acceleration of the implementation of HSBC’s strategy aimed at simplifying the organisation to make it more agile, bringing together Commercial Banking activities and Global Banking and Markets activities.”