HSBC is set to announce $1.5 billion in annual cost savings as part of its ongoing restructuring efforts, with significant job cuts already underway. The bank has laid off nearly 40 investment bankers in Hong Kong, including four managing directors, as it continues to scale back its global investment banking footprint. The announcement will be made alongside its full-year earnings report on Wednesday. The latest round of layoffs includes senior banking figures from HSBC’s APAC team. The cuts extend across key business areas, including equity capital markets, healthcare, real estate, M&A, financial institutions, and technology, media, and telecommunications.
Under CEO Georges Elhedery, who took over in September 2024, HSBC has been aggressively restructuring, particularly in Western markets. The bank announced in January that it would exit mergers and acquisitions advisory and equity capital market operations in the UK, Europe, and the Americas. This shift marks one of HSBC’s most significant retreats from investment banking in decades, as it pivots toward Asia, where it generates the bulk of its profits. Analysts at Barclays estimate that HSBC could ultimately cut between 17,000 and 22,000 jobs as it aims to achieve between $2.5 billion and $3.5 billion in annual cost savings.
The latest layoffs in Hong Kong suggest that Elhedery’s strategy is rapidly taking effect, with HSBC focusing on consolidating its operations into four core divisions: UK banking, Hong Kong banking, corporate and institutional banking, and wealth banking. Despite the job cuts, HSBC is expected to report solid financial results for 2024, with analysts projecting a 5.7% rise in profits to £25.4 billion, driven by lower-than-expected bad debts and strong performance in personal and wealth banking.
The bank is also anticipated to announce a 38% increase in its full-year dividend to 84 US cents per share, amounting to a £11.9 billion payout to shareholders. In addition to dividends, HSBC is likely to unveil a £2.4 billion share buyback, to be completed before its first-quarter results in the spring. This follows last year’s £1.6 billion share repurchase program, reflecting the bank’s strategy to return capital to investors amid its restructuring efforts.
HSBC’s ongoing transformation signals the end of its prolonged attempt to establish a full-scale investment banking operation that could compete with major global players like Goldman Sachs, JPMorgan, and Barclays. While it will continue investment banking in Asia and the Middle East, HSBC’s renewed focus on cost efficiency and high-growth markets underscores its shift away from the capital-intensive investment banking sector in the West. – By MENA Newswire News Desk.