Tuesday, July 23, 2024

HSBC overhauls investment banking

Wednesday, July 10, 2024, 12:05
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HSBC Holdings Plc is revamping parts of its investment bank in a move that will make it look more like rivals such as Citigroup Inc.Executives in HSBC’s global banking business will winnow its existing sector teams into five larger groups, according to a memo to staff seen by Bloomberg. The move will allow bankers to work more efficiently and boost its focus on sectors involving innovation and sustainability, the memo shows. “The simplified structure means teams can operate with more agility and flexibility and positions us for growth,” Adam Bagshaw and Matthew Ginsburg, co-heads of global banking, said in the memo to staff on Wednesday.With the moves, HSBC is following in the footsteps of Citigroup, which also merged a bevy of its sector groups in recent years. That bank, for instance, created a super group focused on technology and communications companies, it has another one that covers healthcare, consumer and retail firms, and it united its energy, power and chemicals teams into a new natural resources team in 2021.HSBC’s new global banking sector groupsLeadershipTechnology, digital and financial servicesAlexander Paul and Dan BaileyConsumer, healthcare and retailDavid Plowman and Guy SlimmonResources, industrials and energy transitionJan LaubjergReal assets and servicesJon ConnorPrivate capital groupJames HorsburghHSBC will hold briefings in the coming days to update employees on the new structure, according to the memo. The company is also planning to host a town hall for all investment banking employees in September. It’s the latest sign that HSBC is shaking up its investment banking division as the lender prepares for a world of falling interest rates, which is expected to hurt the profits of large, global banks like HSBC. Already, the bank is not replacing some staff who have left or resigned in recent months as part of efforts to slow down hiring, Bloomberg News reported earlier this month. Executives have also asked investment bankers to rein in their travel and entertainment expenses and have encouraged them to set up at least 3 client meetings a day in order to make the most of work travel. Employees in some divisions were reminded of some of the expectations on work travel at a recent company town hall. Chief Executive Officer Noel Quinn is readying HSBC for his successor after announcing he plans to step down earlier this year. The lender’s board is aiming to announce his replacement in the coming weeks.When it reports second-quarter earnings later this month, HSBC is expected to report revenue of $16.1 billion, which would be down 4.9% compared to a year ago. Profits are also expected to drop.“Servicing our clients is our priority and therefore ensuring we have the right people in the right places,” an HSBC spokesperson said in a statement. “These groups underline our client focus and alignment.”

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