Mid-ranking bankers at HSBC in London are braced for more cuts as the bank looks to shift more leadership and business away from the UK towards Asia.
As well as moving some of its most senior executives to Hong Kong, the bank is also likely to target mid-ranking employees in London for cuts as it moves more roles to Asia, according to three insiders at the bank.
In recent weeks, employees within the global markets, investment bank as well as infrastructure and operational roles have held informal conversations about potentially moving their positions from London to Asia, the people said. In some cases, their position in London is likely to be put at risk, they added, or a number mid-ranking positions in the UK — at director level — are being consolidated into a more senior position in Asia.
“One tactic is to replace a number of director positions in London with a more senior position, usually managing director, often in Asia,” said one senior banker. “There is a lot of middle management in the UK.”
An HSBC spokesman declined to comment.
HSBC is in the midst of a huge strategic overhaul and will eventually strip out 35,000 jobs as the bank looks to cut costs and focus on its core markets. The UK and the Middle East remain important for the bank, but it is also accelerating efforts to shift more resources to Asia.
Top executives in London are expected to relocate to Hong Kong as part of the bank’s efforts to intensify its focus on Asia, which is still it’s biggest market.
Gary Greenwood, a bank analyst at Shore Capital, said that HSBC’s UK investment banking unit has been going through a “yo-yo effect” for a number of years. “The bank looks to build up its investment bank in the UK, never quite gets there and then looks to downsize again. It makes much more sense to allocate more resources and capital to Asia, where they are in a very strong position,” he said.
HSBC’s Asian operations made $20.9bn in revenues in the first nine months of 2020, or 54% of group earnings over the same period.
Gregg Guyett, the bank’s co-head of global banking and markets, is expected to move from London to Hong Kong, as is Barry O’Byrne, who runs its commercial bank, and Nuno Matos, who has just been promoted to head of wealth and personal banking. The moves would mean that leaders of three of HSBC’s biggest business units will be in Asia.
On 23 February HSBC will reveal its full year results and is also expected to unveil a series of new strategic initiatives, including the closure of its US retail banking network and a renewed focus on Asia. Last year, the UK lender said it would remove $100bn in risk weighted assets, cut thousands of jobs as it pulls back from non-core business units including European equities.
In October, bank executives said around 6,000 jobs had been cut, and hinted that the effects of the Covid-19 crisis could lead to a more radical overhaul.
Mark Tucker, HSBC’s chairman, said last month that the bank needed to “up the pace, up the intensity and up the delivery” of its overhaul. In the third quarter, profits at HSBC fell by 31% to $3.2bn on the same period in 2o19.
The bank unveiled a number of regional leadership appointments on 22 February ahead of its results, also putting its transformation programme in the hands of its chief financial officer, Ewen Stevenson.
Colin Bell, formerly the bank’s group chief compliance officer, will take over from Matos as CEO of HSBC Europe and its UK ring-fenced bank HSBC Bank Plc. Stephen Moss, who is responsible for overseeing HSBC’s business in Europe excluding the UK, will relocate to Dubai for a position CEO for Middle East, North Africa and Turkey (MENAT) and Michael Robertson is now chief executive for the US, Latin America and Canada.
HSBC’s overhaul stalled during the pandemic, when it promised to pause any job cuts at the height of the Covid-19 crisis in March. However, by August the bank had restarted its transformation programme with chief executive Noel Quinn telling staff that the changes announced last February were “even more necessary today”.
He said the bank would look to redeploy people where possible. “I don’t want to over-promise, though, as colleagues will regrettably be leaving us this year where we are unable to provide them with alternative roles within HSBC,” Quinn added.