HSBC Holdings has cancelled some internal events and further curtailed travel as the bank’s new chief executive seeks to keep a tight lid on costs ahead of his first quarterly results.
The lender recently scrapped a summit of its commercial bankers in India as well as some other off-site events around the world, according to people familiar with the matter. Some staff have been told they’ll face restrictions over internal trips until the end of the year while others, including senior managers, saw their planned trips cancelled or delayed, the people said, asking not to be named discussing a private matter.
Essential travel to meet clients is still allowed, the people said. A spokeswoman for HSBC declined to comment.
HSBC is reining in expenses and tightening control under new chief executive officer Georges Elhedery. Central banks around the world have begun to cut interest rates, threatening the margins of big, global lenders. In Hong Kong, its biggest market, HSBC cut its key benchmark rate for the first time since 2019.
The bank has already slowed hiring and asked investment bankers to rein in their travel and expenses. Elhedery also told staff to be disciplined about their spending at his first town hall in Hong Kong in early September.
Elhedery will have to find a way to shave off US$2 billion in costs in order to sustain a key measure of the bank’s profits, according to Bloomberg Intelligence.
Operating expenses rose 5 per cent to US$16.3 billion in the first half of the year, driven by higher technology spending and increases in performance-related pay. It expected the same growth rate in costs for the full year.
Investors are hoping Elhedery will either offer new targets for expenses or detail his plans for keeping a lid on the company’s efficiency ratio – a metric that shows how much it costs to produce a US dollar of revenue – by the end of the year. The bank is due to report its third quarter results later this month.
Europe’s largest lender is also weighing combining its commercial and investment bank divisions as part of Elhedery’s push to eliminate overlapping roles across the company and shed expenses. BLOOMBERG
