HSBC (HSBC.US) is planning to cut costs by at least $3bn

HSBC (HSBC.US) is studying plans to cut costs by at least $3bn as the European bank continues to reorganise its global business under new chief executive Georges Elhedery, according to people familiar with the matter. The bank told managers last week that its overhaul would not be completed until June 2025, the people said. The total cost savings are still being worked out, but executives hope the work will help them cut at least $3bn in expenses, the people said. That would mean a reduction of about 10 per cent in the bank’s spending, which is estimated to be about $32.6bn this year, according to compiled data. The bank is expected to detail the financial impact of its restructuring plan, including one-off costs related to the restructuring, when it reports full-year results in February. A spokesman for HSBC declined to comment. Since taking over in September, Elhedery has cut the size of the bank’s group executive committee by about a third, according to one person. The senior staff cuts are expected to result in the departure of more than 40 per cent of the bank’s 175 senior managers, the person said. Elhedery announced his latest management changes last week, saying the new structure would provide the bank with “a clear competitive advantage and the greatest growth opportunities”. So far, those to leave include Annabel Spring, head of private banking globally, Celine Herweijer, the bank’s group sustainability officer, Stephen Moss, head of the Middle East, North Africa and Turkey, and Colin Bell, who ran the bank’s European business. Nuno Matos, who ran wealth and personal banking and was Elhedery’s main rival for the chief executive role, also left this year. This week, Matos was named the next chief executive of ANZ Bank, Australia’s second-largest bank. Elhedery’s plan centres on creating four new divisions. HSBC is combining its corporate banking business with global banking and markets, while splitting its businesses in Hong Kong and the UK into separate entities and creating a new main banking and wealth division. Bloomberg Intelligence said this month it expected HSBC to “ratchet up” its cost cuts to boost profits more aggressively. In particular, analysts expect the bank’s $19bn annual wage bill, which accounts for a large portion of its expenses, to be further cut.