HSBC's new CEO, Georges Elhedery, has announced a strategic plan to save $300 million in 2025 and reduce costs by $1.5 billion by the end of 2026. Despite strong annual profits and stock performance, the bank aims to streamline operations, which will involve significant severance costs of $1.8 billion over the next two years. Elhedery's initiatives include restructuring the company into 'eastern' and 'western' market divisions and reducing investment banking staff, portraying a vision of increased efficiency and organization within HSBC.
"We are creating a simple, more agile, focused bank built on our core strengths," Elhedery said in a statement. "We continue to take decisive action to enhance our efficiency and profitability."
"Plans to trim personnel expense by 8% over 2025 and 2026 are positive but I don't see a lot of new eye-catching overhaul or cost cutting measures in the release," said Michael Makdad, senior equity analyst at Morningstar.
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