HSBC’s New Organisational Structure and Implications for Corporate Treasury

HSBC’s New Organisational Structure and Implications for Corporate Treasury

HSBC’s recent announcement of a simplified organisational structure, effective from January 2025, is a significant move designed to accelerate strategic execution. By dividing its business into four main units—Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking—HSBC is positioning itself for more focused growth and operational agility​.

This restructuring reflects a trend seen in large global banks, aiming to streamline decision-making and reduce internal duplications. For corporate treasurers, especially those managing global operations, the implications of this new structure are critical. Treasurers often choose banks like HSBC for their global reach, yet frequently discover that even the largest institutions do not function as one cohesive entity across markets. Local forms, country-specific regulations, and the need for regional contacts remain a challenge, even with global giants.

Global Bank, Local Challenges

While HSBC’s vast presence in over 50 markets is undeniably a key advantage, treasurers know that navigating the complexities of local regulations, banking norms, and administrative requirements can undermine the efficiencies gained from a global banking partner. For instance, managing cash across jurisdictions may require unique account structures or compliance procedures that differ widely between markets. This is particularly evident in emerging markets where regulatory frameworks are less harmonized with global standards.

In many cases, treasurers find themselves dealing with the same bank but essentially managing separate relationships with each local entity. This reality raises an important question: Is bigger truly better when selecting a global banking partner?

Is Bigger Always Better?

The idea that larger banks are automatically the best choice for corporate treasury has long been debated. While global banks like HSBC offer unparalleled scale, access to liquidity, and the ability to execute cross-border transactions, the local challenges cannot be overlooked.

For corporate treasurers, a bigger bank might offer:

  • Global Reach and Scale: Seamless cross-border services and extensive product offerings.
  • Stability: Larger institutions typically have stronger balance sheets, making them reliable partners in times of financial turbulence.
  • Cross-Border Expertise: Experienced in managing FX, trade finance, and other multinational needs.

However, these advantages come with their own set of challenges:

  • Local Bureaucracy: Even within the same global bank, treasurers often encounter local bureaucracies that slow down decision-making.
  • Inflexibility: Large banks may not always have the agility to provide tailored solutions, especially when dealing with smaller, localised issues.
  • Communication Gaps: Regional teams may not always be well-coordinated with headquarters, leading to delays and inconsistencies in service delivery.

The Corporate Treasurer’s Dilemma

Corporate treasurers must weigh these pros and cons when choosing their banking partners. While HSBC’s restructuring aims to reduce these internal inefficiencies, it remains to be seen how much of this will benefit the day-to-day operations of corporate treasuries, especially those that rely on HSBC for managing complex global operations.

For treasurers, this restructuring could offer some hope of a more unified service experience. By focusing on specific regions like Hong Kong and the UK, and by integrating its global banking and commercial banking functions, HSBC may reduce the fragmentation that treasurers often experience when dealing with different business units of the same bank. However, HSBC’s ability to execute on this vision will be key.

Insights from Treasury Experts

We thought it would be valuable to get perspectives from Treasury experts, who are also Treasury Masterminds Board members.

Jeremy Reedus, Vice President and Global Treasurer, Varel Energy Solutions, Comments:

Although we can all respect a bank for improving internal efficiencies, the Treasury professional has an additional issue that comes to mind. If the bank is fully integrated into the company’s ERP, then Treasury is faced with a migration to another institution in the near future. This requires additional SME personnel support from Accounting and IT at minimum. In other words, the bank’s strategic decision has larger ripple effects on an organization than just Treasury.

Nicholas Franck, Founder, INTELIGANS, Comments:

One question that come to my mind: does splitting into two segments mean the bank is looking to sell off one or the other? It’s normal practice when a company wants to sell part of itself off to another or to PE investors. That would be a market changing move.

Patrick Kunz, Fonder/CEO, Percunia B.V. Treasury and Finance, Comments:

I am struggling to see this as positive or negative news. So many questions that come to my mind. Will the distance between segments increase? how about global intrabank communication lines? A truly global bank would be great but this will remain challenging for a big bank like HSBC. Time has to tell if this is a smart move. The treasurer judges are still out there.

Conclusion: Rethinking Global Banking Strategies

In conclusion, while HSBC’s organisational changes aim to simplify their operations, treasurers must continue to carefully evaluate whether a bigger bank is truly the better option for their specific needs. In some cases, the answer may be a blend of global and local banking partners, ensuring that they have both the reach and the on-the-ground expertise required to navigate the complexities of international markets.

As HSBC implements its new structure, treasurers will need to monitor whether the promised efficiencies translate into real-world improvements in banking relationships, especially in emerging markets where local compliance and bureaucracy often prove to be the largest hurdles.

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