Reuters reports that HSBC is to axe around a third of its global equities group, or 450 staff, as it continues the restructuring of its investment banking business.
According to the news agency, Stuart Gulliver, co-head of investment banking, confirmed that the bank did look at exiting the equities business completely to focus on fixed income. In the end, it was decided that this was not an option, although HSBC will move away from equity trading for clients and concentrate on trading for its own account.
HSBC has ambitious plans for its investment banking business. Gulliver's co-head, John Studzinski, said: 'If we can't in five years move into the top 10 we have to wonder what's been going wrong here. I don't think that ambition is totally off the wall'.
Despite the announcement of the latest job losses, HSBC's investment bank is in growth mode, particularly in the US where there is said to be no real corporate finance advisory business. And, although the bank has a reputation of paying bonuses at the lower end, Gulliver is confident that the firm will be able to attract in quality people. At last week's conference with investors, he said that 'we have no concerns that we will not be able to pay market-related compensation'.
In a related story, HSBC chairman John Bond last week effectively ruled out a big merger deal. He told analysts that 'there is no need for a transformational acquisition, but opportunities for incremental acquisitions which extend our customer base or provide key product capabilities will be considered'. HSBC has made no less than 27 acquisitions around the world between the start of 2002 and the end of September this year.