"HSBC's London bankers should have seen this coming"
As the dust settles on the revelation that HSBC is winding down its M&A and equity capital markets (ECM) businesses everywhere but Asia and the Middle East, it's becoming apparent that almost no one in the firm had any idea what was about to hit them.
Get Morning Coffee ☕ in your inbox. Sign up here.
Even senior bankers were blindsided. In an article today, Bloomberg reports that the rank and file were informed of the changes in an unexpected call yesterday morning. We understand that HSBC's most senior investment bankers were only told of the changes last Friday.
While the pivot to Asia has been a theme at HSBC for years, the pivot to the Middle East was less obviously foreshadowed. But the signs were very clearly there.
"The writing has been on the wall in London for a long time," says one recently former director in HSBC's investment bank. "They've been moving senior sector managing directors to the Middle East since 2022."
Those moves include Jon Connor, HSBC's head of advisory & investment banking coverage for the Middle East, North Africa and Turkey (MENAT). Connor spent 15 years working for HSBC in Asia and EMEA before being transferred to co-head capital financing and investment banking coverage for the Middle East in 2022. Other transfers include Joe Assouad, the head of sovereign wealth funds coverage, who moved from London in May '22.
The choice of Georges Elhedery as HSBC's CEO also suggested the bank's move Middle Eastwards. Elhedery, who is Lebanese, spent nearly a decade in Dubai after the financial crisis. He moved there from London, first as head of structured rates, then became co-head of global markets in the Middle East of Africa, and was then promoted to MENA CEO.
HSBC insiders say that Elhedery owed his ascension to Samir Assaf, who was CEO of global markets at HSBC between 2011 and 2020. Assaf remains the chairman of the board for HSBC's Middle East business.
If none of this were obvious, there are also HSBC's revenue numbers. Last year, Dealogic says its M&A revenues in the Middle East more than tripled and that its equity capital markets revenues there more than doubled. Increases in Europe and the US were far more modest.
Bloomberg says HSBC's job losses as a result of the strategy shift will be in the "low hundreds". The most fortunate HSBC bankers in London and New York will be transferred to Hong Kong or Dubai. The most foresightful HSBC bankers seem to have moved there years ago.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)
Photo by Scott Rodgerson on Unsplash
