HSBC plans mega $3bn cost savings push under new chief

HSBC is reportedly aiming to achieve at least $3bn in cost savings as part of its most significant restructuring in a decade under new CEO Georges Elhedery. According to Bloomberg News, Europe's largest lender plans to complete its overhaul by June next year.

The revamp will see the London-based bank reorganise into four new divisions and divide its businesses into Eastern and Western geographical sectors. It will also involve job cuts among senior bankers, which Bloomberg reported are expected to result in just over 40 per cent of HSBC’s top 175 managers being axed, as reported by City AM.

City AM approached HSBC for comment. Elhedery, who took over from Noel Quinn as CEO in September, has quickly implemented sweeping changes designed to streamline the bank’s sprawling operations and control costs.

This comes as rate cuts by central banks have begun to squeeze profit margins at large lenders following a period of record-breaking earnings last year. Achieving $3bn in cost reductions would cut approximately 10 per cent off Asia-focused HSBC’s expense bill, which analysts predict will be around $32.6bn this year.

Elhedery’s tenure as CEO has already seen a number of senior executives depart the bank, including global private banking and wealth chief Annabel Spring, group sustainability officer Celine Herweijer, Middle East head Stephen Moss, European boss Colin Bell and Nuno Matos.

Matos, previously the CEO of HSBC’s wealth and personal banking division, was seen as Elhedery's main competitor for the group leadership. However, on Monday, he was named as the CEO of Australia’s second-largest bank, ANZ.