HSBC’s Phillips Moves to London in Investment Bank Overhaul
Gordon French will succeed Phillips as head of global banking and markets in the Asia-Pacific region, according to an internal memo seen by Bloomberg News. The contents were confirmed by Adam Harper, a spokesman in Hong Kong. A new unit called capital financing, which includes equity and debt capital markets and lending operations, will be led by Spencer Lake.
HSBC plans to eliminate as many as 14,000 more jobs over the next three years as Chief Executive Officer Stuart Gulliver seeks to cut an additional $3 billion of costs and revive profitability. The London-based bank has also been selling assets and expanding in faster-growing markets to boost revenue that’s been crimped by Europe’s sovereign debt crisis.
“HSBC has been trying to restructure the organization to become leaner and, if not meaner, then more profitable,” Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., said by telephone today. The investment bank’s overhaul “is part of this effort.”
Jose-Luis Guerrero will head the markets unit, which will include sales, trading and secondary-market operations, Samir Assaf, chief executive officer of global banking and markets, said in the note to staff yesterday. Guerrero and Lake, who have been the co-heads of global markets, as well as Phillips will report to Assaf.
“There will be no impact on the overall portfolio of products and services we provide or the clients we serve,” HSBC said. “There will be no impact on headcount.”
Shares of HSBC fell 0.9 percent to HK$80.80 as of 11:38 a.m. in Hong Kong trading today. The stock has climbed 16 percent in the past year. In London, it closed almost unchanged at 694.80 pence yesterday.
Profit at Assaf’s global banking and markets unit rose 20 percent to $8.5 billion in 2012 as income at its credit business more than doubled. The division will continue to include securities services, payment and cash management and balance sheet management, as well as the client coverage, markets and capital financing units, HSBC said.
Kevin Adeson was appointed vice-chairman of global banking and markets, reporting to Assaf, and will be responsible for “collaboration across business lines,” according to the memo. The reshuffle takes effect on Aug. 12.
Patrick Nolan and Mohammad Al Tuwaijri will continue as heads of global banking and markets for the Americas and Middle East-North Africa regions, respectively.
Gulliver has eliminated $4 billion of costs since becoming CEO in 2011, beating his initial target. He had announced 46,000 job cuts and sold or closed 52 businesses to revive earnings before announcing the bank’s strategy for the next three-year period on May 15. HSBC’s pretax profit in the first quarter increased to $8.43 billion, beating analysts’ estimates, from $4.32 billion a year earlier.
The bank’s $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars was approved by a federal judge yesterday.