HSBC plans big retreat in US, Europe as focus shifts to Asia

HSBC, one of the world’s largest banking and financial services groups, is planning to exit some merger and acquisition (M&A) financing and equities businesses in Europe and the Americas and shift more and more operations to Asia, marking a major shift in its investment banking focus.

As part of the global reorganisation, HSBC announced the start of its operations in Gujarat International Finance Tec-City (GIFT), India’s financial and technology corridor to the world.

HSBC also got a licence from the unified regulator IFSCA, becoming the first international bank to secure investment banking permission and foreign portfolio licence.

HSBC Gift City, a branch of HSBC, HK, has acquired 6.125 per cent equity stake in CCIL IFSC Limited, which is a subsidiary of Clearing Corporation of India Limited (CCIL) that builds and operates a foreign currency settlement system (FCSS) in GIFT City.

HSBC also officially opened its flagship wealth centre for high-net-worth clients in Malaysia, at the Tun Razak Exchange (TRX), the country’s international financial centre located in Menara IQ.

HSBC is accelerating its shift to Asia amidst economic uncertainties in Europe and Donald Trump’s return to power in the United States.

The bank, in a memo sent to employees, indicated a shift in its market focus to M&A and equity capital markets in Asia, including West Asia.

UK-headquartered HSBC, with assets of $3,099 billion as of 30 September 2024, has a worldwide presence and employs around 220,000 people globally. The financial services group, however, has been scaling down its global operations, by exiting low-return consumer banking activities.

The scaling down could affect thousands of jobs, especially in Europe and the Americas, although the bank has not fully revealed the extent of job losses.

HSBC will continue with its debt capital markets and leveraged acquisition finance operations globally, but will scale down dealmaking and corporate equity raising business in the western markets.

Georges Elhedery, who took over as CEO in September last year, is undertaking an overhaul of HSBC’s M&A and corporate advisory activities in Europe and the US so as to make them profitable.

HSBC Bank’s market share in the fees market declined to 1.5 per cent, due mainly to a fall in revenues from its debt financing business, according to London Stock Exchange Group data.