HSBC to exit M&A and capital markets businesses in UK, Europe and the U.S.

HSBC is preparing to wind down its M&A and equity capital markets businesses in Europe, the U.K. and the U.S. amid a broader overhaul of its investment banking operations.

“As part of our ongoing efforts to simplify HSBC and increase leadership in our areas of strength, we are finalising a review of our Investment Banking business,” a spokesperson said Tuesday. “We will retain more focused M&A and equity capital markets capabilities in Asia and the Middle East and will begin to wind-down our M&A and equity capital markets activities in the UK, Europe, and the US, subject to local legal requirements.”

Global investment banking brought in $544 million in the six months to June 30, accounting for just 6.2% of the bank’s net income over the period, according to HSBC’s interim report.

London-listed shares of HSBC were down 0.16% at 11:50 a.m. London time.

The news, first reported by Bloomberg, comes as HSBC CEO Georges Elhedery, who stepped into the leadership role last year, embarks the lender on a broader overhaul targeting cost-cutting efforts.

Back in October, the bank unveiled plans for a new geographic setup and set out to consolidate its operations into four business units, divided between an “Eastern markets” branch — reuniting Asia-Pacific and the Middle East — and a “Western markets” division, comprising the non-ringed-fenced U.K. bank, the continental European business and the Americas.

HSBC, which is due to post annual results on Feb. 19, has benefitted alongside other European lenders from a stretch of high interest rates, but must now brace for the loss as the European Central Bank continues to relax its monetary policy. The bank most recently reported pre-tax profit of $8.5 billion in the third quarter, coming ahead of analyst expectations near $8 billion, according to LSEG data. At the time, the lender also announced a $3-billion share buyback.

The bank has also been weathering change at the top, with its first female Chief Finance Officer Pam Kaur taking office this month and with long-serving chair Mark Tucker expected to step down in 2026, according to Sky News.