HSBC, the UK-based banking giant, has announced a quarterly profit increase of 10% during one of the biggest shakeups in its 159-year history. In Q3 of 2021, pre-tax profits reached $8.5bn (£6.6bn), surpassing analysts’ expectations. HSBC’s new chief executive, Georges Elhedery, pledged to share further details on the bank’s full-year results, due to be published in February 2022. He added that the restructuring plans would “begin immediately”.
The bank’s new structure is to be based on geo-political regions, split into eastern and western markets. This move aims to tackle rising geopolitical tensions and reduce costs across the organisation. Following the announcement, HSBC shares rose by more than 2% in Hong Kong. The bank also confirmed it will repurchase another $3bn of its own shares.
HSBC makes the majority of its profits in Asia and has recently focused on expanding its presence in the region. Alongside the restructuring announcement, the bank revealed it is preparing to complete the sale of its Argentinian business before the end of 2021.
It has also undergone a leadership reshuffle, appointing Pam Kaur as chief financial officer, following more than ten years with the organisation. Kaur is the first female to hold this position at HSBC, and will also take up the role of executive director of the board, subject to election at the next annual general meeting. The appointment came at a critical time for the bank, as it seeks to maintain its position in Asian and Western markets amid growing geopolitical disruptions.
Commenting on the news, Michael Makdad, senior equity analyst at Morningstar, said that “HSBC’s third-quarter results were solid, with no major surprises”. However, he also noted that investors’ focus would be on the “structural overhaul” of the institution
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