HSBC Holdings Plc is set to intensify its investment banking efforts in Asia and the Middle East, following its recent withdrawal from significant operations in Europe and the United States, as stated by Chief Executive Officer Georges Elhedery.

This restructuring initiative is projected to yield $1.5 billion in efficiency savings, allowing HSBC to invest in regions where it holds a competitive advantage to generate higher quality revenue. Elhedery, who has been in his role for about six months, has initiated a comprehensive overhaul at the bank, which included the departure of several senior executives. He merged the commercial and investment banking units and established standalone operations in the UK and Hong Kong, while discontinuing most mergers and acquisitions and equity underwriting activities in the US, UK, and continental Europe.

Elhedery remarked, “The exit that we are processing now in Europe and the Americas is to allow us to focus on the areas where we can really be differentiating to our customers.” The restructuring has received support from Ping An Insurance (Group) Co., HSBC’s top shareholder, which expressed satisfaction with the bank’s new direction, signaling a notable shift from its previously confrontational stance during a dispute with HSBC in 2022. Since Elhedery assumed leadership on September 2, shares of the London-based bank have surged nearly 30% in Hong Kong.

The CEO has also streamlined the bank’s management structure by reducing the number of executives on the re-named key operating committee from 18 to 12. Job cuts have predominantly impacted senior management, and some investment bankers were placed on temporary work arrangements. HSBC has asked hundreds of managers to reapply for positions in its newly formed corporate and institutional banking division, resulting in the exit of several high-profile executives, including Nuno Matos, who previously led wealth and personal banking and was a main competitor for the CEO role.

Elhedery indicated that the bank expects to incur $1.8 billion in severance costs, with most changes occurring in the first half of the year. He acknowledged that while some senior roles will inevitably be lost during this simplification process, HSBC aims to retain talent and offer competitive rewards.

Highlighting the importance of Hong Kong, Elhedery stated that the city is the “heart of HSBC” and the bank will continue to invest there, as it is poised to become a leading cross-border wealth hub. HSBC first opened in Hong Kong 160 years ago, focusing on financing trade between Europe and Asia. By elevating Hong Kong to a standalone market, the bank aims to enhance its ability to respond swiftly to market changes, according to Maggie Ng, HSBC’s head of wealth and personal banking for Hong Kong.

In 2024, Hong Kong accounted for $9.1 billion, or approximately 28%, of HSBC’s pretax profits, based on revised results. The bank is looking to grow its workforce and expand its branch network after acquiring 800 000 new customers last year, largely due to an influx from mainland China, Ng revealed in a separate interview with Bloomberg TV.