HSBC is reshaping its global banking and markets (GBM) division – which delivers approximately a third of the group’s profits – with the creation of a new client coverage team, led by Robin Phillips, the division’s Asia head and head of global banking.
The move, effective from August 12 – which won’t affect headcount or product offering – is aimed at further leveraging the bank’s client relationships in a business group that contains HSBC’s investment banking arm as well as wholesale banking capabilities, including custody services.
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| Samir Assaf, the CEO of HSBC’s GBM group |
The new structure will consist of the following divisions: client coverage; markets; capital financing; securities services; payments and cash management; and balance-sheet management. In effect, the new structure makes client coverage product agnostic. Aside from Phillips’ team, the two previous co-heads of global markets will take on more specific, new roles that play to their strengths.
Jose-Luis Guerrero becomes head of the markets business, which puts him in charge of all of HSBC’s secondary markets businesses.
Spencer Lake heads the new capital financing group, incorporating HSBC’s primary markets business across debt, equity and M&A.
An internal memo, seen by Euromoney and sent by Samir Assaf, the CEO of HSBC’s GBM group, states: “We are separating product from coverage to create a client coverage team that is product neutral and responsible for delivering global banking and markets to clients.
“Capital financing will house the primary products that clients need to support their capital structure, as Basel III encourages a shift towards more capital markets-based financing models.”
Meanwhile, the markets division will be responsible for the sales and trading businesses and the secondary market operations.
Phillips, who will deputize for Assaf, will return to London, with a replacement as head of Asia banking and markets to be announced in due course.
Kevin Adeson will be appointed vice-chairman of GBM, focusing on client relationships and growth initiatives. The credit and lending teams will report to the respective client coverage and capital financing teams.
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| HSBC's Mohammad Al Tuwaijri |
The GBM division has consistently been producing record revenues in recent years, with pre-tax profit in the 2012 fiscal year up 21% year-on-year at $8.5 billion, thanks, in particular, to the group’s growing corporate and FIG client base and strong retail distribution networks in emerging markets focus. HSBC has been a consistent top performer in the non-US global debt markets, and is gradually building a considerable equity and M&A business.
The new structure will also play well to HSBC’s risk advisory and finance business, which is becoming one of the firm’s core strengths, thanks to the breadth and depth of the financing options the bank can provide to clients.
Patrick Nolan and Mohammad Al Tuwaijri will remain respective heads of GBM in the Americas and MENA.
A source close to the changes said roles and reporting lines beneath the top-level reorganization would be largely unchanged.