HSBC is setting its sights on Asia and the Middle East for further growth prospects after wielding the axe at parts of its European operations.
A top boss at Britain’s most valuable bank – and top FTSE100 company by market cap – said both regions have “an enormous amount of capital” which was a significant and permanent trend.
On the Middle East, Michael Roberts, the chief executive of Corporate and Institutional Banking at HSBC, said the group had “underestimated” the area.
“The interesting thing is the amount of money in the Middle East… You have a reordering of the world’s capital flows,” he told Bloomberg TV.
The gushing remarks on prospects in the two regions come as the bank’s chief executive Georges Elhedery crosses the one-year mark on his strategy to strip back costs across the group.
Elhedery has taken the chop to European operations in his relentless pursuit of growth for the bank.
HSBC scaled down its investment banking operations in Europe and the Americas in favour of Asia and the Middle East and staff across the continents faced the axe.
Over ten per cent of the work force in France were culled after HSBC sold its retail banking business in France to CCF – a subsidiary of My Money group.
City AM revealed in February the bank was set to cut a batch of investment bankers in London on the same day pencilled in for bonuses.
HSBC ‘intensifying’ Asia pivot
Analysts previously told City AM the decisions marked a “continuation of the bank’s strategic pivot to Asia which has been intensifying over the past decade”.
Earlier this year, HSBC stormed past Astrazeneca to the top spot on the FTSE 100 index.
The bank holds a market cap of near £178bn.
But the bank’s continued repositioning efforts come amid spiked fears of a fresh tax hike on Britain’s banking sector.
Chancellor Rachel Reeves has faced calls from a batch of think tanks and most recently the Liberal Democrats to turn to the banks for an easy cash grab in the Autumn as she seeks to raise billions of pounds in extra cash to plug exuberant spending commitments.
Elhedery warned in July: “Additional taxation on banks runs the risk of eroding our continued investment capacity in the business and in supporting our customers, and ultimately in delivering growth for the UK”.