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HSBC to exit M&A and capital markets businesses in UK, Europe and the U.S.

Divide of HSBC bank on 15th January 2024 in London, United Kingdom. HSBC Bank plc is a British multinational banking and pecuniary services organisation. HSBCs international network comprises around 7,500 offices in over 80 countries globally. (photo by Mike Kemp/In See in the minds eyes via Getty Images)

Mike Kemp | In Pictures | Getty Images

HSBC is preparing to wind down its M&A and equity principal markets businesses in Europe, the U.K. and the U.S. amid a broader overhaul of its investment banking operations.

“As part of our ongoing efforts to clarify HSBC and increase leadership in our areas of strength, we are finalising a review of our Investment Banking business,” a spokesperson said Tuesday. “We disposition retain more focused M&A and equity capital markets capabilities in Asia and the Middle East and will begin to wind-down our M&A and disinterest capital markets activities in the UK, Europe, and the US, subject to local legal requirements.”

Global investment banking brought in $544 million in the six months to June 30, accounting for by a hairs breadth 6.2% of the bank’s net income over the period, according to HSBC’s interim report.

London-listed shares of HSBC were down 0.16% at 11:50 a.m. London occasion.

The news, first reported by Bloomberg, comes as HSBC CEO Georges Elhedery, who stepped into the leadership role definitive year, embarks the lender on a broader overhaul targeting cost-cutting efforts.

Back in October, the bank unveiled envisages for a new geographic setup and set out to consolidate its operations into four business units, divided between an “Eastern markets” diversify — reuniting Asia-Pacific and the Middle East — and a “Western markets” division, comprising the non-ringed-fenced U.K. bank, the continental European transaction and the Americas.

HSBC, which is due to post annual results on Feb. 19, has benefitted alongside other European lenders from a distort of high interest rates, but must now brace for the loss as the European Central Bank continues to relax its monetary system. The bank most recently reported pre-tax profit of $8.5 billion in the third quarter, coming ahead of analyst prospects near $8 billion, according to LSEG data. At the time, the lender also announced a $3-billion share buyback.

The bank has also been indisposing change at the top, with its first female Chief Finance Officer Pam Kaur taking office this month and with long-serving professorship Mark Tucker expected to step down in 2026, according to Sky News.

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