The news: HSBC is shutting down key parts of its investment banking operations in the UK, US, and Europe as part of CEO Georges Elhedery’s broader restructuring plan, per The Financial Times.
The exact timeline for the closure of these units has not been specified, but the process is expected to unfold over the coming months.
The strategy: The closures are part of the bank’s broader restructuring strategy, in which it’ll split into “eastern” and “western” units while merging its commercial banking and global banking & markets divisions.
It will also close its mergers and acquisitions (M&A) advisory and equity capital markets (ECM) units outside Asia and the Middle East, citing a lack of competitive edge or scale. But HSBC will retain debt capital markets, leveraged finance, real asset finance, and infrastructure finance in these same regions, as they have stronger market positioning.
The gap: Global investment banking accounted for just 6.2% of HSBC’s net income in H1 2024, per CNBC—illustrating the relatively small size of the business impacted. Still, banks with M&A and ECM capabilities should strategically target HSBC’s former clients.
Highlighting proven M&A and ECM success, strong regional networks, and client-first advisory services can differentiate financial institutions from their competitors in these communications. Competitive pricing, exclusive events, personalized financial structures, and seamless onboarding can further attract HSBC’s former clients.
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