HSBC to start cutting top banker roles as it reveals jump in profit
The banking giant said it is ‘moving at pace’ with a major restructuring announced last week.
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Your support makes all the difference.HSBC has said it will cut senior banker roles over the coming months in a bid to reduce costs after revealing a nearly 10% jump in profits.
Chief executive Georges Elhedery said the banking giant is “moving at pace” with a major restructuring announced last week.
The reorganisation will see the number of geographical units reduced from five to two, with the formation of “Eastern Markets”, incorporating Asia and the Middle East, and “Western Markets”, comprising the UK, Europe and Americas.
Mr Elhedery stressed the changes will make the bank “simpler and faster” by axing the doubling-up of roles at a senior level.
The bulk of the cost savings will, therefore, come from trimming the number of top bankers working at HSBC over the next few months.
Mr Elhedery said: “The primary reason for this reorganisation is to make us a simpler, leaner organisation with faster decision-making and stronger empowerment of our frontline people.
“There will inevitably be some de-duplication of frontline governance and therefore inevitably be the reduction of some senior roles in the organisation.”
HSBC will not put a figure on its expected cost savings until February, alongside the release of its 2024 financial results, but the boss said it “will be moving at pace and making organisation decisions over the next few months”.
The update came as the bank said it generated a pre-tax profit of 8.5 billion US dollars (£6.6 billion) between July and September, nearly a tenth more than the 7.7 billion US dollars (£5.9 billion) made over the same period last year.
This came in far higher than analysts’ expectations, which had been for a profit of 7.6 billion US dollars (£5.9 billion) for the third quarter.
The increase was driven by revenue grown in its wealth division, HSBC said, as well as foreign exchange and equities as greater volatility in the financial markets led to more activity among its customers.
I want to be clear that this does not signal in any way preparation or intention to split the group
Furthermore, the chief executive insisted he is not intending to “split” the bank in the decision to restructure across geographic lines.
“I want to be clear that this does not signal in any way preparation or intention to split the group,” Mr Elhedery said.
“Our distinctive leadership is to connect our customers to opportunities across the world.”
He also stressed there are “no geopolitical reasons why we would have done this”, amid conflict in the Middle East and the forthcoming US presidential election.
HSBC has faced pressure from its biggest shareholder, Chinese insurer Ping An, to split the bank into two with the creation of a separate Asia-headquartered business.
A plan to break up the bank was rejected by shareholders last year, but the restructuring announcement initially prompted some speculation that it could eventually pursue a break-up.
Bosses of the lender previously said they were planning to bolster income in Asia, where it makes the bulk of its profits, amid the pressure from shareholders.
We’ve been really happy with the approach the Government has been taking vis-a-vis growth and investment, and the opportunities we’ve seen both from domestic and international customers who are looking at the UK as a great investment destination
Meanwhile, Mr Elhedery said HSBC is “very optimistic” about the UK economy ahead of Wednesday’s Budget.
“We’ve been really happy with the approach the Government has been taking vis-a-vis growth and investment, and the opportunities we’ve seen both from domestic and international customers who are looking at the UK as a great investment destination,” he said.
It echoes remarks made by rival banks including Barclays and Lloyds, which said they would get behind the Labour Government’s pro-growth plans.