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Here’s why HSBC’s co-heads are based outside Asia

Greg Guyett’s reshuffle of HSBC’s global banking and markets division last month appeared to run counter to the bank’s ‘pivot to Asia’ narrative, but the reality is somewhat different.

Guyett, who is CEO of the global banking and markets (GBM) division, created a new layer of management last month when he appointed Lisa McGeough and Gerry Keefe to the newly-created roles of co-heads of global coverage as part of the reshuffle.

McGeough is based in London while Keefe is based in New York.  Given that APAC is by far the biggest revenue generator for GBM, this struck some as an odd choice, given the bank’s commitment to invest in APAC as a central pillar of its strategy.

But HSBC's senior management has shown precisely why Guyett made that choice – and how the bank defeated a proposal from Chinese insurer Ping An to spin off its Asian business.

In a series of presentations at the start of a week-long seminar for investors and analysts in Hong Kong and Singapore. HSBC said that 60% of total revenues earned by HSBC’s wholesale clients in Asia were generated cross-border.  According to David Liao and Surendra Rosha, co-CEOs of Asia-Pacific for HSBC, North America accounted for a third of all wholesale revenues, while Europe accounted for a quarter.  The connected nature of HSBC’s revenues enabled the bank’s management to prove the case against a break-up, as well as underlining why the appointments of Keefe and McGeough make sense.

Just over a week after HSBC faced down an attempt to spin off its Asia business at its shareholder meeting, the bank’s senior managers were touring the region to show that its pivot to Asia strategy, launched in 2021 and involving a $6bn investment in the region, is bearing fruit. “In addition to our core strength in Hong Kong, we now have growth engines in mainland China, India, Singapore and beyond,” said Group Chief Executive Noel Quinn.  “All parts of HSBC Asia are now motoring. In mainland China, we are ideally positioned to facilitate business with the rest of the world; in South and Southeast Asia, we have invested heavily in Singapore, and we have significantly bolstered our growing business in India.”

Quinn’s bullishness comes as the bank set out a number of targets for its Asia business, including “high-single digit percentage’ revenue growth in its wealth management division by January 2027, and a return on tangible equity in the mid-teens – the first time it has set regional targets for the business. It is taking a more cautious approach to lending in the short term, but promised to increase it overall over the next four to seven years.

The bank is looking to grow the business in the region following a two-year Asia ‘global transformation plan’ which resulted in 11,000 job cuts and $1.1bn of cost savings.  As a result of this, HSBC said it was able to fund 8,000 ‘growth roles’ between 2020 and 2022.

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AUTHORDavid Rothnie Insider Comment

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