HSBC CEO Georges Elhedery has unveiled a sweeping restructuring plan to simplify the bank’s operations. The plan is expected to deliver $1.5 billion in annual cost savings by the end of 2026.
The strategy, initiated in October, seeks to create a “simpler, more dynamic, and agile organisation” for Europe’s largest bank.
In a statement on Wednesday, Elhedery highlighted the bank’s strong 2024 performance, with pre-tax profits rising 6% to 32.3 billion and shareholder profits increasing 222.9 billion. HSBC also announced a $2 billion share buy-back program to be completed by the first quarter of this year.
The restructuring includes splitting the bank into four divisions: Hong Kong, UK, corporate and institutional banking, and international wealth and premier banking.
HSBC will also streamline its geographic operations by merging its Asia-Pacific and Middle East regions and consolidating its European and US businesses.
The plan is expected to generate 0.3 billion in cost reductions by 2025, with the full 1.5 billion annual savings target achieved by 2026. However, HSBC anticipates incurring $1.8 billion in costs over 2025 and 2026 to implement the changes.
Elhedery has also trimmed senior management layers, with hundreds of managers reportedly required to reapply for their roles. The restructuring has already buoyed investor confidence, with HSBC’s Hong Kong shares reaching an 11-year high.
HSBC, which derives most of its revenue from Asia, continues to pivot toward the region, focusing on wealth management and fast-growing markets.
