By Lars Mucklejohn
Of Financial News
HSBC's equities trading and research unit in Europe and the Americas won't be shuttered as chief executive Georges Elhedery continues to overhaul the bank.
The U.K. lender's stock trading and research platform will survive Elhedery's ongoing plans to simplify the bank he took over as CEO in September, according to a person familiar with the matter.
During its full-year results, in response to a question from journalists on whether HSBC could shut its equities trading and research functions in non-core regions, Elhedery said that it was "finalizing a review" into investment banking units including its stock trading unit in Europe and the Americas.
However, any plans are unlikely to follow the radical move by HSBC announced in January to close its equity capital markets and M&A units in the U.K., Europe and Americas. It has refocused its investment bank on core functions like leveraged finance and debt underwriting as well as shifting dealmakers to more profitable markets such as the Middle East and Asia.
Analysts and bankers had speculated that HSBC's equities sales and trading functions could be next on the chopping block. However, the bank believes these units play a role in supporting its global prime finance, wealth and cash equities franchise in Asia, the Middle East, North Africa and emerging markets, the person said.
But the CEO told reporters he did "not expect the same size benefits" as the roughly $300 million the bank expects to save annually by exiting M&A and equity capital markets in Europe and the Americas.
HSBC is still completing its latest review, a person familiar with the matter said. An HSBC spokesperson declined to comment on the exact scope of the review.
Since taking over from Noel Quinn last September, Elhedery has embarked on an overhaul of HSBC's global operations in a bid to cut costs and streamline the lender.
The U.K. lender started cutting hundreds of investment banking jobs in London last month, Financial News reported.
HSBC is targeting senior roles as it tries to reduce its expense bill by $1.5 billion over the next two years.
Last month, Elhedery said he expected to reduce employee costs by 8% over the next two years, but declined to say how many of its 211,000 staffers would depart.
Financial News is owned by News Corp, the parent company of The Wall Street Journal and Dow Jones Newswires.
Write to Lars Mucklejohn at lars.mucklejohn@dowjones.com
Website: www.fnlondon.com
(END) Dow Jones Newswires
March 06, 2025 08:23 ET (13:23 GMT)
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