(Bloomberg) -- HSBC Holdings Plc Chief Executive Officer Georges Elhedery wants investors to know one thing about his restructuring plan: it’s not about splitting up the bank.
Asked repeatedly on Tuesday why the London-based lender was adopting a new structure based on splitting its business into western and eastern units, Elhedery said the change had nothing to do with geopolitical tensions or a past campaign by Ping An Insurance Group Co. — one of its largest shareholders — to spin off its Asian operations.
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“I want to be clear that this does not signal in any way preparation or intention to split the group,” Elhedery said, speaking on a call with reporters.
Instead, the new HSBC CEO pointed to simplification as the guiding rationale for the moves announced last week, which will see the bank merge its commercial and investment banking operations, as well as establish its core businesses in Hong Kong and the UK as standalone entities.
Elhedery said the measures would result in net cost savings, but investors will have to wait until February when the bank announces its full-year results to hear what those will be. In the meantime, the restructuring was already getting underway and he warned that senior managers would be the main targets of any related job losses.
“We are going to see a reduction of numbers of senior roles, and therefore there will be inevitably senior role exits over the coming months that will be part of the reorganization,” said Elhedery.
On top of the job cuts, HSBC will also continue to sell off assets no longer considered core to its business. Elhedery said a “selective review” of the bank’s operations would be taking place that could lead to further country exits, as well as sales of product lines that no longer make sense. On the other hand, he added that acquisitions could also be on the cards in areas where the company wants to grow.
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