British banking giant HSBC might make a drastic move in an attempt to cut costs. According to a report by Bloomberg News, HSBC is currently discussing the possibility of merging its commercial and investment divisions.
The move would see new CEO Georges Elhedery delivering on his promise to speed up the bank’s growth while making its business more efficient. HSBC is already the biggest bank in Europe in terms of total assets.
The idea behind merging commercial and investment divisions is to eliminate the overlapping roles while also shedding costs. Additionally, the belief is that it would be easier to attract clients of different sizes this way.
If the merger ends up taking place, the combined division is predicted to become the biggest revenue generator for HSBC, with $40 billion in annual revenue. It is important to note that no final decision has been made and that the bank might end up adopting a different strategy to address its goals.
The idea of HSBC joining its commercial and investment business has been around for quite some time now. However, former CEO Noel Quinn was against such an idea, so it was never fully explored.
HSBC is already in the process of making significant changes to its business strategy, toning down its presence in the United States and some European markets while shifting its focus to Asia.