A number of thoughts are prompted by the restructuring announcement of UK/Hong Kong-listed HSBC this week.

When HSBC, under its new CEO Georges Elhedery, created headlines earlier this week by announcing its first ever female chief financial officer, Pam Kaur, and restructured its business lines, it did not immediately set the stock market alight.

Shares in the London-headquartered bank (it is listed in the UK and Hong Kong) are up by about 7.5 per cent so far this year, slightly outperforming the FTSE-100 Index of blue-chip UK stocks.

The four new divisions (as of the start of 2025) are Hong Kong; the UK; corporate and institutional banking; and international wealth and premier banking. 

The fact that international wealth and premier banking – which includes private banking, a business for HNW and ultra-HNW clients – has its own division and boss (Barry O’Byrne) is a clearly good sign in terms of HSBC’s focus on this area as a priority. Given its Asian heritage, and the rise of a large and growing affluent middle class in that region, it makes sense for HSBC to position itself accordingly. For example, it has sought to tap into the Wealth Connect system hooking up affluent investors in mainland China, Hong Kong and Macao. It is significant in Southeast Asia and hubs such as Singapore. 

But perhaps the creation of two divisions, explicitly putting Hong Kong and the UK into separate areas, is the most significant move of all. It makes crystal clear what perhaps ought to have been evident for years, that the Hong Kong and UK sides of the business are radically different. And it is also bound to fuel speculation that at some point, maybe if geopolitics become ugly, HSBC might want to achieve a relatively amicable separation from its Asia business. Of course, it is unlikely to be ever conceded in public, but one wonders whether that contingency is being planned.

There have been calls in the past to break this banking behemoth apart – still arguably one of the few truly global banks. For example, Ping An, the Asia-based insurer, has called for HSBC to be broken up, unlocking the value it says is being hampered by its structure. The firm has been building a stake in the lender since 2017. The group first proposed to split off HSBC’s Asian operations in April 2022. In May this year, Ping An cut its HSBC stake, perhaps taking the view that its calls for change were not bearing the fruit it sought. At around the same time, Noel Quinn, CEO, surprised markets by announcing that he was standing down, handing the keys of office to Georges Elhedery.

Perhaps it is inevitable in these troubled times that a bank with feet planted in Europe and Asia is going to come under scrutiny over its ability to withstand the “deglobalisation” trend that some fear is already under way. Tensions between the West and China are very much in the back of executives’ minds.

In the past, HSBC has made a point of its one-bank, integrated model being a net positive. By making it clear that there are distinct Hong Kong and UK business divisions, the bank is keeping speculation bubbling of a possible change down the line.