SINGAPORE/LONDON

In a dramatic shift aimed at enhancing operational efficiency, HSBC Holdings has compelled hundreds of its managers to reapply for their positions within the newly established Corporate and Institutional Banking (CIB) division. Chief Executive Georges Elhedery is spearheading this initiative as he seeks innovative ways to refine the bank's functionality amidst increasing pressure on profitability.

Sources indicate that interviews are actively being conducted, setting the stage for a competitive dynamic where senior bankers from the commercial banking division will face off against their counterparts from the global banking and markets unit for available roles within the revamped CIB division. As a consequence, the British banking giant is anticipated to lay off several hundred managing directors and senior bankers in the weeks ahead.

This overhaul also signifies a change in title nomenclature, as HSBC will replace the general manager titles for certain senior positions with the more universally recognized managing director titles, aligning itself with standard practices in the financial services industry.

While no final decisions have been confirmed, and details may evolve, it is clear that this restructuring is part of a broader strategy that HSBC began unveiling on October 22. The bank, with a workforce of around 215,100, has been undergoing significant changes, including past reductions in headcount of over 100,000 in the past 16 years, in attempts to streamline its expansive operations.

The motivation behind these layoffs stems from HSBC’s struggle with declining profit margins as global monetary authorities embark on a rate-cutting spree. Despite an ambitious plan to repurchase roughly $35 billion in shares over the past 18 months, the bank's stock performance in 2024 has notably trailed rivals like Barclays and Standard Chartered.

As part of the restructuring, Michael Roberts has been designated to lead the CIB division, while Barry O'Byrne will oversee a new international wealth and premier banking business. Roberts expressed commitment to executing this restructuring thoughtfully, with a complete management framework anticipated to be in place by February, coinciding with the bank’s comprehensive details on the reorganization.

In an effort to streamline operations, HSBC is also adjusting its geographic structure, creating an Eastern regional unit that encompasses Asia-Pacific and the Middle East, alongside a Western market that includes its non-ring-fenced bank in Britain, Europe, and the Americas. Notably, both Hong Kong and Britain will be maintained as standalone units.

In his recent earnings call with investors, Elhedery emphasized that the restructuring is not about fragmenting the bank, but rather simplifying its operations to enhance overall efficiency and sustainability. He cautioned that senior management will be primarily affected by upcoming job reductions, reinforcing the bank’s focus on achieving net cost savings.

This restructuring could mark a pivotal moment in HSBC's illustrious 159-year history, prompting stakeholders to watch closely how these changes unfold and impact the bank’s future trajectory. Stay tuned for what happens next!