HSBC to exit parts of investment banking business in UK, US and Europe

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HSBC will shut down key parts of its investment banking business in the UK, Europe and the Americas as part of chief executive Georges Elhedery’s plan to overhaul its operations.

Europe’s biggest lender will close its mergers and acquisitions advisory and its equity capital markets businesses outside Asia and the Middle East, the bank said in a memo on Tuesday.

The units “really don’t have scale”, a person with knowledge of the decision said. “It was just a very tough job to build up to a level where [HSBC] has a competitive edge.”

HSBC will keep its debt capital markets, leveraged finance, real asset finance and infrastructure finance businesses in those markets, the person said.

The move, first reported by Bloomberg, comes as Elhedery, who took the helm of the bank last year, runs a wide-ranging restructuring that splits the bank into “eastern” and “western” units.

Globally, HSBC’s investment banking business accounted for just 6 per cent of its total revenues in the first half of last year, according to the bank’s interim report. Investment banking revenues for the period were down 3 per cent from a year earlier. 

HSBC did not immediately respond to a request for comment.

This is a developing story