HSBC’s Roberts says the bank’s future in Asia, Middle East

The future of HSBC Holdings is in Asia and the Middle East because of the amount of wealth and the capital flows between the two regions, according to the top executive who heads the British lender’s corporate and institutional banking.

“You have had two regions that have had an enormous amount of capital,” Michael Roberts told Bloomberg Television in an interview on Monday (Sep 22), adding that’s a significant and permanent trend. “The interesting thing is the amount of money in the Middle East. We have underestimated that. You have a reordering of the world’s capital flows.”

The London-headquartered bank has just gone through the biggest overhaul in at least a decade that saw its investment banking operations retreat from the Americas and Europe in favour of Asia and the Middle East. The revamp has also resulted in hundreds of job cuts, the departure of many top executives and streamlining of layers of management.

There are more and tougher things to do, Roberts said, adding HSBC has never been a “bulge-bracket” bank. The transformation the lender has seen within such a short period of time is potentially the biggest in its history, he said.

“We will achieve the cost savings that we have set to achieve,” he said. “Year Two brings much more focus on simplification – not just cost efficiencies but being a better bank, able to respond quicker to be more agile. A lot of that takes a long time.”

The first phase of the revamp, which is organisational change, is coming to an end now, he added.

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Answering a question on what HSBC is doing in private markets, Roberts said part of the restructuring was to put the bank’s private credit operations in one place. BLOOMBERG