Cuts to US and UK teams follow bank's exit from Canadian operations last year
According to a leaked internal staff memo sent today, HSBC is scaling back its investment banking operations in the UK, Europe, and the Americas as part of CEO Georges Elhedery’s restructuring plan to streamline the bank and refocus on its core strengths in Asia and the Middle East. The bank announced it will shut down its mergers and acquisitions (M&A) advisory and equity capital markets (ECM) businesses in these regions, a decision likely to result in job losses across its offices in London and New York.
The decision was described by HSBC as part of its ongoing efforts to simplify its business. "We will begin to wind down our M&A and ECM activities in the UK, Europe and the United States, subject to local legal requirements," the bank stated. While no specific figures were disclosed, the move is expected to impact roles in its affected divisions, though HSBC continues to employ 220,000 people globally.
The exit from these areas signals a broader strategic shift. HSBC will retain its debt capital markets, leveraged finance, and infrastructure finance businesses in Europe and the Americas, where it has a stronger competitive edge. Investment banking revenues accounted for only 6% of HSBC’s global income in the first half of last year, highlighting the limited scale of these operations in its broader portfolio. "It was just a very tough job to build up to a level where [HSBC] has a competitive edge," a source familiar with the decision explained.
This restructuring reflects Elhedery’s wider plan to reshape HSBC, merging its commercial banking and global banking divisions to streamline governance and reduce costs. The bank has set a cost-cutting target of $300 million, with reductions in senior management positions already underway. Annabel Spring, the head of global private banking and wealth, and Celine Herweijer, group sustainability officer, have both recently departed as part of these changes.
Read more: RBC reorganizes leadership after HSBC Canada acquisition
Elhedery took over as CEO in 2024, following a period of rising interest rates that buoyed HSBC’s performance. However, the bank is now preparing for a future where falling rates could weigh on profits. "Our intention is to move to a more competitive, scalable, financing-led model," said Michael
Roberts, HSBC Bank’s chief executive. Elhedery’s leadership has been marked by his commitment to efficiency, as well as his focus on digital innovation and cost management.
HSBC’s decision to exit the M&A and ECM markets outside Asia is seen as a blow to London’s reputation as a global hub for equity capital markets. The bank is a broker or joint broker to over 25 UK-listed companies, including big names like easyJet, Boohoo, and Pets at Home, many of which will now need to seek new advisory arrangements.
The restructuring also follows HSBC’s acquisition of Silicon Valley Bank UK in 2023, which had raised hopes of a focus on tech-driven investment banking. However, the withdrawal from ECM and M&A casts doubt on those ambitions. Instead, HSBC is doubling down on its focus in Asia, where it generates the majority of its profits and sees the greatest growth opportunities.
With its renewed focus on its areas of strength, HSBC hopes the restructuring will allow it to weather the challenges of a volatile global economy. As Elhedery continues to implement his vision, the bank’s efforts to simplify and refocus may deliver significant savings, though they are not without consequences for its operations in the West.
These structural changes align with broader trends in the banking industry, as lenders grapple with shrinking profit margins caused by falling interest rates. Banks like Barclays and NatWest have recently reported strong results, but, like HSBC, they are also focusing on efficiency measures.
