HSBC to cull underperformers as some bankers face zero bonuses

[LONDON] HSBC Holdings is preparing to hand some bankers little or zero bonuses as the 160-year-old British lender seeks to emulate its Wall Street rivals with a more hard-edged, “eat-what-you-kill” stance.The bank plans to encourage underperforming staff in divisions including investment banking and wealth management to depart following bonus payouts in the coming weeks, according to people familiar with the matter. This will also include those at managing director levels, some of the people said and added that no final decisions have been made.Such a move is aligned with the vision of chief executive officer Georges Elhedery, who wants to bring the bank more in line with pay practices at American peers. For employees, this is the latest round of tough messaging coming from the leadership of Europe’s largest bank, which is in the midst of a major restructuring. Since taking the helm in the second half of 2024, Elhedery has shuttered most of HSBC’s deals and equity underwriting operations in the US, UK and continental Europe, while combining its commercial and investment banking units. The overhaul led to the exit of several senior and veteran executives.“We are committed to ensuring our employees are rewarded competitively, with a focus on differentiation determined by performance, to attract and retain talent,” a representative for the bank said in an email.The bank’s overall bonus pool in 2024 was little changed at US$3.8 billion from the previous year, bucking an industrywide trend of higher payouts. Some employees in areas such as the corporate and institutional banking arm were warned to expect lower payouts.While Elhedery has emphasised that his revamp – with anticipated savings of US$3 billion – is aimed at transforming HSBC into a “simpler, more dynamic and agile organisation,” the exercise has been weighing on its balance sheet. The lender’s cost-to-income ratio rose to 49.9% in the first half of 2025 from 43.7% in the same period a year earlier, amid higher operating expenses.Investors, however, have rewarded Elhedery’s efforts. HSBC’s share price has almost doubled since his promotion to the top role on Sept 2, 2024, though the gains have lagged behind those of rivals including Barclays and Standard Chartered. HSBC is still the largest financial institution in Europe with a market valuation of about £225 billion (S$390 billion), ahead of Spain’s Banco SantanderSwitzerland’s UBS Group and France’s BNP Paribas.The London-headquartered firm, one of the world’s leading trade banks and a key conduit for commerce between Asia-Pacific and the rest of the world, has had deep roots in Asia after its founding in 1865 in Hong Kong by Scottish merchants. In the past few years, HSBC has deepened its focus on the continent even as global businesses straddling the East and the West face rising risks in an era of shifting geopolitics. It has increased its attention on the Middle East as well.HSBC, which reports full-year earnings for 2025 this month, is also exploring options for its insurance unit in Singapore. A sale would follow other HSBC disposals in Europe and North America. Last year, the bank agreed to sell its UK life insurance business to Chesnara and its custody business and private banking operations in Germany. It also sold its French life insurance unit. BLOOMBERG