By Paul Clarke
Of Financial News
HSBC Holdings PLC's major shift towards Asia won't mean scaling
back in the U.K., according to the co-head of its global banking
and markets unit, who plans to hire dealmakers with the flashiest
executive contacts to land more big-ticket transactions.
As the broader business reels from a sweeping overhaul that will
see thousands of jobs cut, Greg Guyett, co-chief executive of
global banking and markets at the U.K. lender, told Financial News
that any reductions in his unit will unlikely hit "frontline"
staff. He wants to hire big bankers in key sectors and
Mr. Guyett is one of a cohort of senior bankers set to relocate
from London to Hong Kong this year, as HSBC pivots towards its
biggest market to revive its business. The others are Nuno Matos,
who leads wealth and personal banking, Barry O'Byrne, global head
of commercial banking, and asset management boss Nicolas Moreau.
Georges Elhedery, Mr. Guyett's co-head, will remain in the U.K.
"I don't agree that this means we're deprioritizing the U.K. or
Europe," he said on his move to Hong Kong. "For global banking and
markets, where we have co-CEOs, it makes more sense to have one of
those in Asia and one in London. We are reshaping our client base
in Europe and the Americas, but we're reshaping it to focus even
more energy on those clients that value our international network
A former JPMorgan Chase & Co. banker, Mr. Guyett in March
last year took charge of the HSBC global banking and markets unit,
which houses its investment bank and sales and trading business.
His move to Asia marks a return to the region for the dealmaker,
who led JPMorgan's greater China and Asia-Pacific investment bank
during a 30-year career at the U.S. firm.
His appointment came shortly after the bank unveiled a radical
strategy shift that will cut costs by $4.5 billion, shed 35,000
jobs and reduce risk-weighted assets by $100 billion by 2022.
Global banking and markets has been at the sharp end, with $47
billion of the $52 billion in risk-weighted assets that were
removed last year coming from that unit. On the trading floor, jobs
were slashed in its equities division, with key executives also
shifted from London to Asia or Paris.
Capital is being diverted out of global banking and markets in
the U.S. and Europe, primarily in trading, towards its biggest
market of Asia, where it is set to invest $6 billion over the next
five years as it expands in wealth management and investment
However, despite the broader cuts, Mr. Guyett said the bank is
looking to beef up its team of senior dealmakers.
"We need to keep adding bankers that have access to the
C-suite," he told Financial News. "We need bankers that can be
strategic advisers to chairmen and CEOs. We have some great
bankers, but not enough to cover all those clients from an
investment banking perspective, so we're definitely adding."
On cost cuts within GBM, Mr. Guyett said the focus was on
investing in technology that would allow the unit to run "smoother,
easier and better," rather than cutting bankers.
"I would expect the number of people to come down in GBM but
that's not really about the frontline--it's about the processes
behind that," he said.
HSBC's investment banking strategy hinges on prioritizing the
core regions of the U.K., Asia and Middle East, and using key hubs
including the U.S. to allow clients to access emerging markets. Mr.
Guyett insists the shift towards Asia doesn't mean pulling back
The U.K. lender hired one of Deutsche Bank AG's top dealmakers,
Adam Bagshaw, as co-head of advisory and investment banking
coverage in June. Mr. Guyett said he brought Mr. Bagshaw in to
"intensify hiring" of sector-focused bankers in the U.K. and
Europe, and it has also been recruiting senior dealmakers in
This year, HSBC has recruited Winston Cheng, as co-head of
technology, media and communications and Heidi Chan to lead
consumer and retail investment banking in Asia. In Europe, Steven
Wirth joined as global head of real asset fund coverage, while Lisa
McGeough will take over as its new head European investment
Mr. Guyett's approach has echoes of previous investment banking
bosses at HSBC, who have also embarked on a recruitment spree of
senior dealmakers from Wall Street and European rivals without
making much progress in the fee league tables.
His predecessors, Goldman Sachs Group Inc. banker Matthew
Westerman, who co-headed HSBC's global banking business for around
18 months until November 2017, and ex-Morgan Stanley dealmaker John
Studzinski in 2003, both launched aggressive expansions before
facing resistance from more conservative factions of the bank's
HSBC ranked 14th globally by investment banking fees in the
first quarter of 2021, in line with the previous two years,
according to data provider Dealogic. In debt markets, it finished
11th in 2020, but was 27th by equity capital markets revenues and
30th in the M&A fee league tables.
Mr. Guyett insists the bank isn't chasing league table bragging
rights, but wants to gain a greater share of M&A and ECM
activity amid the current boom. HSBC's recent big-ticket deals this
year include Saudi oil giant Aramco's $12.4 billion sale of its
stake in a pipelines business to a U.S. consortium led by EIG
Global Energy Partners and a $5.5 billion buyout of Jardine
Strategic by its Hong Kong conglomerate parent Jardine
In the U.K., HSBC is bolstering its corporate broking functions,
having won 18 new clients over the past year, and is building a new
U.K. mid-market M&A team under former Macquarie banker, Jacques
Callaghan, who could build the team up to 25 bankers.
The strategy is part of HSBC's move to create closer links
between its commercial banking unit, which houses thousands of
clients, and tap them for lucrative investment banking work. James
Horsburgh, who has been leading leveraged finance in Asia, will
move from Hong Kong to focus on this initiative, it announced in
The mid market is increasingly crowded, with Goldman Sachs,
JPMorgan and Bank of America Corp. all ramping up over the past
year. Mr. Guyett said HSBC has an edge.
"We already have the clients," he said. "I defy the other banks
to show me their offices in Birmingham or the north of England, or
Edinburgh. We've got bankers all over the place, and lend to these
clients all the time."
Mr. Guyett has been working for two days a week in HSBC's Canary
Wharf headquarters over the past few months, but insists there's no
pressure for those lower down the ranks to come in. The bank has
remained cautious about reopening its U.K. headquarters, with
around 4% of its 10,000 staff coming into its Canary Wharf office
throughout the latest U.K. lockdown.
HSBC is rolling out hybrid working for its employees, with its
senior executives shifted from the 42nd floor of 8 Canada Square on
to hot desks two floors below, and cutting 20% of global real
estate by the end of this year.
Investment banks, however, have traditionally relied on
in-person training younger recruits, office facetime and
jet-setting for client meetings, so the wholesale move to flexible
working is likely to be less pronounced in this unit.
"I'm not a big believer that we're going to be pitching by Zoom
all the time," said Mr. Guyett. "There will be more of that, but
it's very important to go out and meet with clients."
However, Mr. Guyett does expect a shift in the way its
investment bankers work. Even before the pandemic, only between 50%
to 65% of seats in its Canary Wharf headquarters were occupied by
global banking staff.
"It's pretty astounding that we were occupying less than two
thirds of the office space," he said. "The opportunity to release
that cost and reinvest it in the business and hire more people is
(END) Dow Jones Newswires
May 04, 2021 08:00 ET (12:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.