HSBC unveils major restructuring to become ‘simpler, more dynamic and more agile’

HSBC has announced a major organizational change in its efforts to make the banking giant ‘simpler, more dynamic and agile’.

The lender plans to operate as four business units – Britain, Hong Kong, corporate and institutional banking, and international wealth and premier banking – while effectively separating its western and eastern operations.

The UK division will include the country’s commercial banking operations, as well as retail banks such as M&S Bank and telebanking pioneer First Direct.

All commercial banking activities outside Great Britain and Hong Kong will be part of the corporate and institutional banking business.

The segment will also include the global banking and markets business, and a new ‘Western Markets’ region covering Europe, the Americas and the UK unringed bank.

Meanwhile, the Asia Pacific and Middle East regions, where the company makes most of its profits, will be classified as ‘eastern markets’.

HSBC said the overhaul will “reduce the duplication of processes and decision-making built into the current structure and result in greater alignment and flexibility in serving our customers.”

To coincide with this, HSBC plans to replace the group’s executive committee, whose 18 members support CEO George Elhedery in the day-to-day management of HSBC, with a twelve-person operating committee.

The Financial Times reported this earlier this month HSBC is considering eliminating senior bank items to help save $300 million in costs.

Elhedery said: “The changes we are announcing today will make it easier for our colleagues to serve our customers and drive the group’s future success.

‘The new structure will result in a simpler, more dynamic and agile organization as we focus on executing our strategic priorities, which remain unchanged.’

HSBC also said on Tuesday that Pam Kaur will become the bank’s new chief financial officer.

Kaur, 60, has been with HSBC for almost a dozen years and is currently the company’s Chief Risk and Compliance Officer.

In the three decades before joining the firm, she worked for many major banks including Deutsche Bank, RBS and Lloyds Banking Group, starting her career at E&Y where she qualified as a chartered accountant.

Sir Mark Tucker, chairman of the HSBC Group, said Ms Kaur was “highly respected and well known by the board and this was the unanimous choice. I wish Pam the best of luck in her new role.”

HSBC shares were flat at 675.3p on Tuesday morning, meaning they are up around 7 per cent this year.