HSBC Global Brand at the Brim as it Increases its Wager on Asia

At a large conference table in Beijing, HSBC Chairman Mark Tucker leaned into the microphone and told senior Chinese officials and British business leaders that he spoke for all UK companies there who were hoping for closer economic relations.

The chairman of the biggest bank in Europe, Tucker, was accompanied by Rachel Reeves, the finance minister of the United Kingdom, who had asked him to head a delegation that would seek Chinese backing for Britain's growth plan.

He told Chinese Vice Premier He Lifeng and others at the opening of the UK-China Financial Services Summit on January 11 that "it is more important than ever that we accelerate and sustain the forward momentum with a clear focus on the material and mutually beneficial agenda."

A few weeks later, the lender would announce that it would be closing its equity capital and mergers and acquisitions operations in Europe and the Americas, giving in to Wall Street competitors who have dominated the market in recent years. More significantly, Tuesday's announcement signaled a decision to give Asian corporate clients precedence over Western businesses.

As US President Donald Trump's pro-business agenda has fueled hopes of a dealmaking bonanza this year and beyond, insiders were taken aback by the timing of HSBC's largest investment banking layoff in decades.

However, some HSBC veterans claimed that the teams of specialized bankers who advised large Western corporations on their business transactions had rarely turned a profit on their own and that Georges Elhedery, the CEO of the HSBC Group, was audaciously getting rid of costly sacred cows that his predecessors had chosen to retain.

In an emailed statement, Michael Roberts, CEO of HSBC Bank Plc and of Corporate and Institutional Banking, stated, "We are among the last truly global banks standing that provide its clients leading banking products and services which span transactional banking to capital markets."

"We are dedicated to providing our clients with worldwide service."

According to a former executive who oversaw the equity capital markets and M&A business lines, Elhedery, who was appointed to the top position last September, is a pragmatist who is going through HSBC's operations "line by line," eliminating departments that do not generate revenue or employees who do not contribute meaningful client relationships.

According to estimates made by Citigroup analysts on Tuesday, HSBC's European and US ECM and M&A businesses together probably only made up 19% of the lender's total investment banking revenue and 0.3% of its total group revenue.