HSBC set to wind down UK, European and US investment banking arms

HSBC is set to wind down parts of its investment banking operations across the UK, Europe and North America as part of a sweeping global restructuring plan under new chief executive Georges Elhedery.

The move comes after Europe’s biggest lender revealed plans to make $3bn (£2.4bn) of cost savings last year and reorganise into four new divisions, split between East and West.

“We will retain more focused M&A and equity capital markets capabilities in Asia and the Middle East, and we will look to wind-down those activities in Europe, the UK and the Americas,” an HSBC spokesperson told City AM .

“Our intention is to move to a more competitive, scalable, financing-led model,” the firm said in a memo to staff, seen by Reuters .

In the note to staff, bosses acknowledged the move would be unsettling for those advising on dealmaking and corporate capital raising in the affected regions.

“As part of our ongoing efforts to simplify HSBC and increase leadership in our areas of strength, we are finalising a review of our Investment Banking business,” the spokesperson added.

HSBC’s share price has fallen 0.7 per cent on the news.

Elhedery’s plan to streamline HSBC has already seen the firm lay off scores of senior bankers, with expectations that over 40 per cent of HSBC’s top 175 managers will be axed.

The bank has already seen a number of senior executives leave, including global private banking and wealth chief Annabel Spring, group sustainability officer Celine Herweijer, Middle East head Stephen Moss, and European bosses Colin Bell and Nuno Matos.

Elhedery, who replaced Noel Quinn as CEO of HSBC four months ago, has quickly shaken up the banking giant’s business, aiming to rein in costs and streamline its operations.

Just two months after he began in the role, hundreds of managers were asked to reapply and interview for their roles, as HSBC began to merge its corporate and investment banking businesses.

Banks are looking to slash costs as interest rate cuts begin to squeeze profit margins following a period of record-breaking earnings.