New CEO clicks HSBC Rubik’s cube into right place
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Liam Proud
LONDON, Oct 22 (Reuters Breakingviews) -HSBC HSBA.L, 0005.HK has changed a lot in its almost 160-year history. Yet many of its CEOs have grappled with a familiar question: how to manage a global bank with overlapping management teams for the different regions and business lines? New boss Georges Elhedery has landed on a logical fix. But if it works too well, there is a risk investors will wonder if HSBC really needs to be so sprawling.
Barely seven weeks after getting his feet under the desk, Elhedery is making his mark on the London-based bank. The former chief financial officer on Tuesday announced the promotion of risk boss Pam Kaur to fill his old job. He also unveiled a sweeping overhaul of the lender’s structure.
The three existing global business lines will become four new divisions. The two entities that currently serve businesses – commercial banking, and global banking and markets – will merge into one new super-unit, covering everything from smaller corporate clients to trading and debt underwriting. Meanwhile, the domestic-focused UK and Hong Kong divisions will become their own separate standalone reporting divisions. The fourth and final unit will be focused on international wealth management and related businesses.
There’s much to like. First, Elhedery’s plan drops the pretence of the local Hong Kong and British divisions working as integrated parts of separate global business lines. The new UK unit, for example, will comprise the domestic-focused retail and commercial bank, which for supervisory reasons functions broadly as a standalone balance sheet anyway. It always seemed likely that this unit and the Hong Kong-focused one already operated of their own accord, and the new reporting structure makes that clearer.
Second, the rejig gets rid of some overlapping responsibilities. The old structure included both global business-line bosses and separate regional heads. It wasn’t always clear to investors who was closer to the action. Now, the bosses of the new geographic structure, split into “Eastern” and “Western” clusters, will be the same people who also head the business lines: David Liao and Surendra Rosha for the Hong Kong and the Eastern geography, and Michael Roberts for the wholesale unit and Western markets. In other words, there’s less overlap in the management structure, thus boosting accountability.
Still, there are a few questions for Elhedery to answer. Retail banking in Mexico and Australia lack an obvious home. Nor is it clear how much money the reshuffle will save. Over time, the new structure could raise more fundamental questions. If the UK and Hong Kong domestic-focused businesses outshine the rest of the business, it raises the question of whether they need to be part of HSBC at all. Elhedery’s predecessor Noel Quinn offloaded several single-country retail divisions, like France. Doing the same with one of the bank’s two home-country units would be extreme, but the new structure might one day at least put it on the agenda.
Follow @Breakingviews on X
CONTEXT NEWS
HSBC on Oct. 22 said that it had appointed Pam Kaur as chief financial officer, effective from the beginning of 2025.
Chief Executive Officer Georges Elhedery also said that he was restructuring the group along four new business lines: Hong Kong, the United Kingdom, corporate and institutional banking, and international wealth.
The boss of the corporate and institutional unit, Michael Roberts, will also oversee a geographic cluster of businesses known as the “Western markets”, which will comprise the non-retail banking bits of the UK business, continental Europe and the Americas.
David Liao and Surendra Rosha, joint heads of the new Hong Kong unit, will also head the “Eastern markets” geography, which includes all of Asia, Oceania and the Middle East.
Geographic breakdown of HSBC 2023 pre-tax profit https://reut.rs/3YeqIbi
Breakdown of HSBC's existing business lines https://reut.rs/4hdyTNQ
Editing by Aimee Donnellan and Streisand Neto
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
