Report: HSBC considers merging commercial and investment banking to reduce costs
Some executives believe that the merger can help HSBC reduce some redundant back-office positions and cut costs. The merged department will become HSBC's largest source of revenue, contributing approximately USD 40 billion to the company annually
According to Bloomberg, HSBC Holdings is considering merging its Commercial Banking division with its Global Banking and Markets division, as one of the cost-cutting measures taken by the new CEO Georges Elhedery.
The merged department will bring together over 90,000 employees, responsible for serving businesses of all sizes. Some executives believe that the merger can help HSBC reduce some redundant back-office positions.
If merged, this department will become HSBC's largest source of revenue, contributing approximately $40 billion annually to the company, surpassing its Wealth and Personal Banking division.
Currently, the Commercial Banking division serves small and medium-sized enterprises in 50 markets, generating pre-tax profits of $13.3 billion in 2023, while the Global Banking and Markets division brings in $5.9 billion in revenue. The Wealth and Personal Banking division serves 41 million consumers globally, generating around $11.5 billion in revenue in 2023.
HSBC executives have previously considered merging the Commercial Banking and Global Banking divisions, but this proposal faced strong internal opposition, including from former HSBC CEO Noel Quinn. However, after Quinn stepped down earlier this month, the idea is being reconsidered as HSBC looks for ways to streamline its operations