Some executives believe that the merger will enable HSBC to reduce some duplicate back-office positions and reduce expenses. After the merger, the division will become HSBC's largest source of revenue, contributing approximately $40 billion to the company each year.
According to Bloomberg, HSBC Holdings Limited is considering merging its commercial banking division with its global banking and marketing business unit as one of the measures taken by new CEO Georges Elhedery to reduce expenses.
The combined division will bring together more than 0.09 million employees and will be responsible for securing the business of companies of all sizes. Some executives believe that the merger will allow HSBC to reduce some of its duplicated back-office positions.
If combined, this division will become HSBC's largest revenue source, contributing approximately $40 billion to the company each year, surpassing its wealth and personal banking division.
Currently, the commercial banking sector serves small and medium-sized enterprises in 50 markets and achieved pre-tax profit of $13.3 billion in 2023, while the global banking and market business unit generated $5.9 billion in revenue. The Wealth and Personal Banking segment serves 41 million consumers worldwide and generated approximately $11.5 billion in revenue in 2023.
HSBC executives have considered merging commercial banks and the global banking sector in the past, but this proposal has met with strong internal opposition, and former HSBC CEO Noel Quinn also opposed it. However, after Quinn left the job earlier this month, the idea was re-examined as HSBC was looking for ways to streamline its business.