HSBC is overhauling its equities trading unit in London, cutting jobs and shifting senior UK-based staff to Paris or Hong Kong in the latest example of a bank scaling back in stock trading.
The UK lender has told staff of its plans to make cuts in its London equities division in the past two days, according to two people familiar with the matter. HSBC has cut some employees, but also offered others the chance to transfer to its Paris and Hong Kong office rather than accept redundancy, the people said.
A number of senior executives in its London-based equities team are also moving to new locations. Oliver Kadhim, who is currently head of sales trading for Europe, the Middle East and Africa, is set to move to Hong Kong to become co-head of Asia equity execution alongside James Grafton.
Joelle Tarrant will move to Paris to become head of equity execution for continental Europe. Her current position in London is head of European Union electronic execution and she also has responsibility for market structure in the equities unit globally.
Alex Ells will take over high touch sales and trading within equities for both North America and Emea. He will also maintain his role as global head of high touch facilitation.
As well as the executive moves, HSBC has put a number of London-based equities staff at risk of redundancy, according to two people with knowledge of the moves. Ashley Bazely, who joined HSBC in 2015 from JPMorgan Cazenove, and trader Jodie Smith were among those ‘at risk’, the person said.
Smith didn’t immediately respond to a request for comment, Bazely was unavailable for comment.
The moves to Asia within the equities division are not all one-way traffic, however. Ed Duggan, head of equity execution for Asia-Pacific, is set to move from Hong Kong to London to become global head of electronic execution for equities.
HSBC’s equities traders in Paris were also among the job losses announced by the bank in September last year, with around a third of its 678-person French investment bank expected to be cut by early 2022.
The bank is also implementing a strategy to shift to Asia, and has plans to invest $800m in its global banking and markets unit in the region over the next five years. Senior executives including Greg Guyett, co-head of global banking and markets, and Barry O’Byrne, who runs its commercial banking business, are expected to transfer from London to Hong Kong as part of the shift.
Financial News reported that beyond the executive relocations, some employees within its global banking and markets unit were also being offered a move from London to Hong Kong.
In a memo to staff in June 2020, HSBC said it was planning to simplify its business in Europe. The lender said its European business will operate out of two main hubs in London and Paris and under the new structure London would maintain overall management responsibility for Europe. The bank made deep cuts to its equities business last year, and has scaled back in rates trading.
HSBC is in the midst of a broader restructure announced in February 2020, which will see 35,000 jobs eliminated across the business and $100bn in risk-weighted assets stripped out, with its markets business expected to feel the brunt of the cuts. In October, bank executives said around 6,000 jobs had been cut, and hinted that the effects of the Covid-19 crisis could lead to a more radical overhaul.
The bank’s equities business remains small relative to its UK and US rivals, and HSBC has installed new leadership in an attempt to turn the business around. Hossein Zaimi, a 16-year veteran of the UK lender, left his role as head of equities in July and was later replaced by Franck Lacour. Revenues in its equities unit were up by 2% to around $1bn for 2020.
The bank has found itself embroiled in political controversy related to China’s crackdown on dissent in Hong Kong. HSBC chief Noel Quinn faced questioning from UK lawmakers last month over the bank’s actions in Hong Kong, which included the freezing of some customers’ accounts under the order of local police.
HSBC is one of the largest financial groups in the region, with the bank generating more than two thirds of its profits from Asia.
Equity trading units have been hit hard in recent years, as increased regulation, competition and rising costs have led to widespread job losses. Investment banks have retrenched from trading stocks in recent years, with some pulling out entirely. Deutsche Bank decided to exit its global equities business completely in July 2019, as part of a plan to cut 18,000 jobs and reduce costs by €6bn. Australia’s Macquarie Group said it was repositioning its equities business in October 2019, cutting jobs in London and New York, citing “structural changes in the broader market.”
Correction: A previous version of this story had incorrect quarterly revenue figures for HSBC’s equities unit.