HSBC wants to look more like other Wall Street firms

HSBC Holdings Plc is revamping parts of its investment bank in a move that will make it look more like rivals such as Citigroup Inc.

Executives in HSBC’s global banking business are combining several of its industry coverage groups, according to people familiar with the matter. Such moves would allow bankers to work more efficiently, the people said.

“Servicing our clients is our priority and therefore ensuring we have the right people in the right places,” an HSBC spokesperson said in a statement. “These groups underline our client focus and alignment.”

With the moves, HSBC is following in the footsteps of Citigroup, which merged a bevy of its sector groups in recent years. That bank, for instance, created a super group focused on technology and communications companies, it has another one that covers healthcare, consumer and retail firms, and it united its energy, power and chemicals teams into a new natural resources team in 2021.

It’s the latest sign that HSBC is shaking up its investment banking division as the lender prepares for a world of falling interest rates, which is expected to hurt the profits of large, global banks like HSBC. Already, the bank is not replacing some staff who have left or resigned in recent months as part of efforts to slow down hiring, Bloomberg News reported earlier this month. 

Executives have also asked investment bankers to rein in their travel and entertainment expenses and have encouraged them to set up at least 3 client meetings a day in order to make the most of work travel. Employees in some divisions were reminded of some of the expectations on work travel at a recent company town hall. 

Chief Executive Officer Noel Quinn is readying HSBC for his successor after announcing he plans to step down earlier this year. The lenders board is aiming to announce his replacement in the coming weeks.

When it reports second-quarter earnings later this month, HSBC is expected to report revenue of $16.1 billion, which would be down 4.9% compared to a year ago. Profits are also expected to drop.