HSBC announces new structure as part of major overhaul

HSBC has announced a major restructuring under the direction of new chief Georges Elhedery, aiming to slash costs and concentrate on the bank's most profitable sectors. The banking giant is reorganising into four main divisions and will geographically divide operations into East and West.

This includes the amalgamation of its commercial and institutional banking arms, as well as the establishment of a fresh international wealth and premier banking division. The remaining two divisions will consist of a new UK business and a Hong Kong-focused unit.

Additionally, HSBC plans to restructure along geographic lines, creating "Eastern markets" that include Asia and the Middle East, and "Western markets" that cover the UK, Europe, and the Americas. These changes are expected to be implemented by 2025.

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Reports have suggested that this overhaul could result in job cuts among the bank's high-earning senior bankers, particularly within the extensive commercial and investment banking sectors. The introduction of Eastern and Western markets will also bring previously independent regions, such as Europe and the Americas, under the leadership of a single CEO.

Michael Roberts is set to head both the corporate and institutional banking and the Western markets divisions. Mr Elhedery, who assumed his role as CEO last month, commented: "The new structure will result in a simpler, more dynamic, and agile organisation as we focus on executing against our strategic priorities, which remain unchanged."

Mr Elhedery said: "By making these changes, we can better focus on increasing leadership and market share in those businesses which have clear competitive advantage and the greatest opportunities to grow."

HSBC also announced changes to its leadership team, including the appointment of Pam Kaur as chief financial officer. Ms Kaur, who has been with the bank for over a decade, is reportedly the first woman to hold this position, previously held by Mr Elhedery.

The restructuring will reduce the bank's executive committee from 18 to 12 members. The overhaul is expected to result in cost savings of up to $300 million (£231 million).