HSBC announces its first female CFO in major restructuring. With the announcement of a new geographic arrangement, integrated operations, and a new CFO—the lender's first female finance chief—the bank has made a significant revamp.
 |
| HSBC Announces Its First Female CFO in Major Restructuring |
HSBC Restructures Sensitive Managerial Positions: CNBC
HSBC on Tuesday introduced a new geographic structure and streamlined its operations into four business divisions, as part of a major makeover that included the appointment of the lender's first female finance director.
The bank's shares were unchanged in early London trading Tuesday. The UK-listed stock is up more than 6% year to date.
As part of the restructuring outlined in regulatory filings with the Hong Kong bourse, HSBC intends to divide its operations between a "Eastern markets" branch, reuniting Asia-Pacific and the Middle East, and a "Western markets" division, which will include the non-ringed-fenced U.K. bank, the continental European business, and the Americas.
Ping An, a Chinese insurer and HSBC's largest shareholder with over 9% of the company, has previously advocated for the separation of HSBC's Asian operations from the rest of the firm. However, this proposal was finally turned down at the bank's annual general meeting last year.
In an effort to "reduce the duplication of processes and decision making," the bank also revealed plans on Tuesday to streamline its operations. It will function through four sections starting in January: corporate and institutional banking, international wealth and premier banking, Hong Kong, and the United Kingdom.
The bank's new corporate and institutional banking section will combine its commercial banking business (excluding Hong Kong and the United Kingdom), global banking and markets business, and Western markets wholesale banking operations.
According to UBS analysts, the extent of the required reorganization is now "unknown and important."
"Coordinating functions for a group with 213,978 staff involves exceptional costs, a divisional shift provides the opportunity for new CEO cost reductions," they said in a memo titled on Tuesday, "Simpler, faster, better?" .
Restructuring HSBC Bank's Top
Since the Covid-19 outbreak, HSBC, like many other European lenders, has benefited from a high interest rate environment. However, since the European Central Bank began relaxing monetary policy in June, that support is now being lost.
In July, HSBC announced a share repurchase program of up to $3 billion and reported a pretax profit of $21.56 billion for the first half of the year, above predictions. On October 29, the bank is scheduled to release its next financial report.
Elhedery was reportedly targeting the bank's senior management earlier this month as part of cost-cutting restructuring measures that may save up to $300 million, according to a Financial Times report.
As part of the managerial reorganization revealed on Tuesday, HSBC said that Pam Kaur, who is now the group chief risk and compliance officer, will succeed temporary CFO Jon Bingham as CFO on January 1.
This is HSBC's second major leadership change in as many months, following the appointment of former finance chief Georges Elhedery as CEO in July.