HSBC Reportedly Considers Commercial-Investment Bank Merger

Banking giant HSBC is reportedly considering a merger of its commercial and investment bank operations.

The plan is part of new CEO Georges Elhedery’s effort to eliminate overlapping roles across the company and reduce expenses, Bloomberg reported Monday (Sept. 9), citing unnamed sources.

The merger could marry HSBC’s global banking and markets business, creating a combined division with a 90,000-person workforce that would be the bank’s largest driver of revenue at $40 billion a year, according to the report.

Executives at the bank had previously considered merging the commercial and global banking units, but the idea was opposed by former CEO Noel Quinn, the report said.

Quinn, who stepped down earlier this month after 37 years with the bank and five as CEO, had argued that merging the divisions would be disruptive, per the report. Amid the change in CEO, the idea is being reconsidered as the bank looks to streamline.

HSBC did not respond to PYMNTS’ request for comment.

Elhedery, who was named Quinn’s replacement, had been serving as HSBC’s finance chief since last year. He has been with HSBC for nearly 20 years, serving as co-CEO of global banking and markets, leading the markets and securities services, and serving as CEO for the Middle East, North Africa and Turkey.

This summer saw reports that the bank was slowing its hiring and asking investment bankers to cut expenses, as management tried to slash costs in anticipation of interest rate cuts. The bank was said to be leaving positions vacant in some roles and pausing hiring altogether in certain departments, while also encouraging its investment bankers to group client meetings together to capitalize on business travel.

In other banking news, PYMNTS wrote this week that more than 40% of companies with revenues exceeding $100 million are already using The Clearing House’s RTP® network, and 68% plan to adopt instant payments via RTP or the Federal Reserve’s FedNow® Service within the next two years.

“Despite this momentum, traditional payment methods remain prevalent,” PYMNTS wrote.

Checks still account for 15% of B2B payments for retailers and manufacturers and 21% for real estate transactions. While the benefits of instant payments are acknowledged, the full transition is still underway.