HSBC is overhauling its organizational structure under new CEO Georges Elhedery, simplifying its business into four parts and naming its first female CFO.
Hong Kong and U.K. operations will stand alone as two of the four pillars, effective Jan. 1, the bank announced.
Beyond that, HSBC will combine its corporate and institutional banking into one unit, and international wealth and premier banking into another. Within those, the bank plans to divide its operations between “Eastern markets” — comprising Asia-Pacific and the Middle East — and “Western markets,” encompassing its non-ring-fenced U.K. bank, Americas operations and business in continental Europe.
HSBC said it wouldn’t detail the financial impact of the moves until it announces its full-year results in February. That may leave several questions unanswered when the bank reports its third-quarter earnings Oct. 29.
But Elhedery, in a separate memo seen by Bloomberg, said “there will inevitably be a reduction in duplicated roles, particularly at senior levels.”
“The leadership team will spend more time with you in the coming days to explain these changes in more detail and to give you the opportunity to ask questions,” Elhedery wrote in the memo, also seen by Reuters.
A spokesperson for the bank confirmed the memo's contents but declined further comment to the wire service.
First woman CFO
HSBC also Tuesday named Pam Kaur as its next CFO, effective Jan. 1. Kaur, the bank’s chief risk and compliance officer, is an 11-year veteran of HSBC who started as head of internal audit, according to her LinkedIn profile.
Kaur is set to become the bank’s first woman CFO, occupying a role Elhedery held before being named CEO in July.
“We had a strong bench of internal and external candidates to choose from and Pam was the exceptional candidate to recommend to the Board,” Elhedery said in a prepared statement. “I look forward to partnering with her for the next stage of the Bank’s growth and development.”
Kaur’s appointment means interim CFO Jon Bingham will revert to his other role as global financial controller. HSBC said it will fill its open chief risk and compliance officer role “in due course.”
Kaur was considered a front-runner for the position, ahead of internal candidates that included Greg Guyett, HSBC’s global banking and markets, Bloomberg reported. Guyett will take on a new role as “strategic clients chair,” the bank announced Tuesday.
Kaur, meanwhile, has been named an executive director — although that, too, is up in the air. With the reorganization, HSBC’s 18-member executive committee is being replaced by a 12-member operating committee, the bank said Tuesday.
Her base salary as CFO will be £803,000 alongside a fixed-pay allowance of £1,085,000. She’s also eligible for an annual incentive award up to a maximum value of 215% of base salary and a long-term incentive award up to a maximum of 320% of base salary, to be determined by the bank’s remuneration committee.
Before joining HSBC, Kaur logged stints at Citi, Lloyds, Royal Bank of Scotland and Deutsche Bank.
“I'm not sure you could actually find a greater collection of banks that have been through the fiery furnaces of issues, and she's been in finance, in audit or in risk in all of them," one former co-worker told Reuters, of Kaur's experience. "You never want anyone in a senior position seeing bad stuff for the first time. You need someone who's actually been around, who has faced live bullets before they go into battle.”
Business revamp
The four-silo structure is meant to boost the bank’s agility and put increased focus on leadership and market share in HSBC’s most competitive businesses, Elhedery said.
“This is how we will fast forward our plans to execute our strategy, unleash the full potential of the bank and ensure our talented colleagues can thrive, and deliver best-in-class products and service excellence, for our customers,” Elhedery said. “When our customers succeed, so do we.”
HSBC will integrate its commercial banking business outside of the U.K. and Hong Kong with its global business and markets group — forming a corporate and institutional division to be led by Michael Roberts, the bank’s Americas CEO.
International wealth and premier banking will bring together HSBC’s premier banking-focused businesses outside of the U.K. and Hong Kong, its global private bank, and its asset management and insurance businesses. That will be led by Barry O’Byrne, who was considered a CEO candidate before Elhedery’s appointment.
HSBC’s Hong Kong business will comprise personal banking and commercial banking under co-CEOs David Liao and Surendra Rosha. Its U.K. business will comprise U.K. personal banking, including First Direct and M&S Bank, and U.K. commercial banking, including innovation banking, under CEO Ian Stuart.
“The changes that we are announcing will make it easier for our colleagues to serve our customers and drive the future success of the [HSBC Holdings] Group,” Elhedery 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.”