HSBC has trimmed front-line staff from its investment bank in the UK, as a dealmaking slump this year is set to prompt a fresh round of layoffs across the sector.
The UK lender, which is in the midst of an ongoing cost-cutting exercise unveiled in February 2020, has axed a handful of roles within its global banking unit in London in recent weeks, according to people familiar with the matter.
The cuts span ranks from vice-president to managing director, they added.
An HSBC spokesperson declined to comment.
HSBC set a cost-cutting target of between $5-5.5bn when it unveiled its full-year results for 2021. Its global banking and markets unit was also the target of a 2020 overhaul aimed at reducing costs, which is expected to eventually result in a headcount reduction of around 35,000 people.
Despite ongoing cost-cutting targets, HSBC has so far limited job cuts to support functions and relied on attrition of staff rather than redundancies where possible.
The UK remains a strategic market for HSBC’s investment bank and it has been adding new dealmakers and shifting bankers into fresh roles in recent months. It created a new team of dealmakers focused on private markets and promoted James Horsburgh to lead its team covering financial sponsors. Julian Wentzel, who leads its global banking business in the UK and international Europe, is moving to Dubai to head its Middle East investment bank. It has also hired Sarah Wiggins, Greg Scott and Lars Kraemer as senior dealmakers in its UK team.
Banks battled for top dealmakers last year after an unprecedented boom that brought in $130bn in fees across the industry. However, so far in 2022, investment bank revenue has slumped by 39%, according to data provider Dealogic, and banks are restarting job cuts that were paused during the pandemic.
Goldman Sachs restarted its annual cull of between 1-5% of bankers in September, and German bank Berenberg has also cut 100 roles globally. Meanwhile, Canadian investment bank BMO Capital Markets has cut dealmakers, Bloomberg reported.
Across the group, HSBC is on course to miss its cost-cutting target by $500m next year, chief financial officer Ewen Stevenson told an industry conference on 12 September, due to inflation. He added that “the only way to take that out, I think, is to be pretty brutal internally on costs”.