It comes amid growing pressure on the bank to move its headquarters to China, growing criticism of its treatment of Hong Kong dissidents and questions over a change in UK and US relations with the Asian superpower.
HSBC is having to navigate a possible shake-up of relations after Sir Keir Starmer’s government signalled a reset of Britain’s stance towards China. The Government has commissioned a cross-Whitehall review of Britain’s relationship with the country, which suffered under the Tory government as a result of human rights clashes and Beijing spying allegations.
David Lammy, the Foreign Secretary, signalled a softer stance after dropping pre-election plans to classify its treatment of the Uyghurs as genocide ahead of meeting Beijing officials last week.
Meanwhile, renewed tensions between the US and China, the two largest economies in the world, remain a fresh possibility following the US presidential election on Nov 4.
Donald Trump, the Republican candidate, has vowed to take jobs from China if re-elected back to the White House by imposing aggressive tariffs on companies which did not move jobs back to the US.
The threat of rising geopolitical tensions between East and West poses problems for HSBC because it must keep both sides happy to do business.
The issue has caused headaches for the lender in the past after it came under fire for supporting a Beijing-backed authoritarian crackdown in Hong Kong in 2020 which banned all anti-government activity.
The bank argued at the time that it “supports all laws that stabilise Hong Kong’s social order”. Since the rule was introduced, it has frozen the bank accounts of various pro-democracy activists and denied pension payouts to Hong Kong residents who have fled to Britain. The All-Party Parliamentary Group on Hong Kong last year accused the FTSE 100 bank of “doing the dirty work of the Chinese Communist Party”.
HSBC also had to fend a shareholder rebellion from Chinese insurer Ping An, its largest shareholder, who demanded the bank split off its western business and focus on China.
The insurer argued that a break-up would give HSBC’s Asian business more autonomy, especially from UK regulators, which in 2020 pressured the bank to cancel its annual dividend because of the pandemic. HSBC makes most of its money from Asia, after recording more than $16bn (£12bn) in profits from China and Hong Kong last year – more than half of the $30bn recorded group wide. The UK accounted for $8.3bn.
The £120bn lender has also come under pressure from investors who argued that too much focus remained on London and the bank should relocate its headquarters to Asia.
Mr Elhedery on Tuesday said: “The new structure will result in a simpler, more dynamic, and agile organisation as we focus on executing against our strategic priorities, which remain unchanged.
“By making these changes, we can better focus on increasing leadership and market share in those businesses which have clear competitive advantage and the greatest opportunities to grow.”
The overhaul follows reports that Mr Elhedery was considering cost cutting measures which could save up to $300m (£231m) by reducing top management layers.
HSBC, which employs about 214,000 people globally, has been stripping out duplicated roles for years to streamline management and lower costs.
On Tuesday the bank also named Pam Kaur, currently chief risk and compliance officer, as its first ever female finance chief.