HSBC lays out reshaped investment banking unit; creates corporate, financials and multinationals group

PUBLISHED : Tuesday, 07 June, 2016, 2:11am
UPDATED : Tuesday, 14 June, 2016, 11:12am

HSBC Holdings detailed a new structure for its investment-banking unit to enlarge the scope of the business to encompass its largest corporate clients, four months after it hired Matthew Westerman from Goldman Sachs Group to help lead it.

The firm created a corporate, financials and multinationals banking group, led by Philippe Henry, to combine the lending and transaction-banking units, Westerman and Robin Phillips, who jointly lead the investment bank, said on Monday in a memo to staff.

The investment bank also started a structured-finance joint venture with the trading division, which will be run by Kevin Godfrey.

Global banking and markets chief executive Samir Assaf has reorganised the business amid pressure to cut costs and win more fees from its biggest clients. A few dozen senior bankers have left in recent weeks as HSBC eliminates duplicate roles from the combination of the advisory and capital-financing operations, a person familiar with the matter said.

“The environment around us is changing, and we must adapt,” the co-heads wrote in the memo. The new structure will “support our ambition of becoming a consistent top three strategic banking partner to our clients” and “improve returns for our shareholders by improving our profitability and generating efficiencies”.

HSBC has slumped 17 per cent this year amid concerns over its revenue outlook as growth slows in Asia, persistently high compliance and anti-financial crime costs and uncertainties over its capital-buffer requirements.

Chief executive Stuart Gulliver has closed about 80 businesses across the world and exited HSBC’s least profitable countries as he seeks to reassure investors he can boost returns and guide the bank through turbulent markets.

Henry previously oversaw investment banking in continental Europe, and his regional responsibilities will be taken over by Westerman and Phillips, according to the memo. The corporate, financials and multinationals banking group will seek to combine credit, lending and transaction-banking services in one place for large companies, HSBC said.

The unit will also be responsible for managing balance sheet and financial crime risks, allocating capital and boosting cooperation with HSBC’s wider trade finance and cash management businesses.