HSBC to Integrate Investment Banking
Byline: Nick Gilbert
HSBC is set to abandon the separate banking licence held by its investment bank and integrate all its City of London operations into its main commercial banking business.
The investment bank, which incorporates securities trading and research, corporate finance and M&A, will become a division of the main bank working alongside corporate and institutional banking. The investment bank and markets division has 17,000 staff worldwide, about 4,600 of whom are based in the UK.
HSBC chairman Sir John Bond's reorganisation, which will take effect this summer, will need parliamentary approval to sanction the surrender of the separately incorporated subsidiary's banking licence.
Insiders believe that the reorganisation will boost the chances of Stephen Green, who heads the investment bank in its current form, succeeding Keith Whitson as chief executive of HSBC. Green, whose full title is chairman of HSBC investment banking and markets, is responsible for areas including investment banking, asset management and private banking, as well as treasury. He already reports directly to Bond rather than Whitson.
The existence of the reorganisation plan probably explains renewed rumours that HSBC is to close its investment bank completely. Other bankers will inevitably interpret the move as the possible prelude to a significant diminution of the investment banking operation, involving further job cuts. …