HSBC Shifts Investment Banking Focus from West to Gulf & Asia Amid $1.5B Redeployment

HSBC’s strategic repositioning under Georges Elhedery reflects a decisive move away from traditional Western-heavy investment banking operations toward more growth-oriented sectors in Asia and the Middle East. In January 2025, HSBC announced it would wind down its mergers & acquisitions (M&A) advisory and equity capital markets (ECM) activities in the UK, Europe, and the United States, citing a lack of competitive scale in those markets. [1][2] These changes are not marginal: HSBC reported that its global investment banking brought in just US$544 million in the six months to June 30, accounting for only ~6% of net income, underscoring the relative smallness of those businesses against its broader footprint. [1][2]

Concurrently, HSBC is reinforcing its presence in the Gulf and Asia. Beyond passive support, it has actively deployed resources: hiring local leadership (e.g., in Saudi Arabia), expanding Gulf-based deal teams, and reportedly transferring senior dealmakers from London to Gulf offices to deepen capabilities in energy, infrastructure, capital raises, and financing. [3][5] HSBC’s CEO has stated that the bank expects to “double down” on Asian and Mideast investment banking, retaining—and in some cases expanding—its M&A/ECM functions in those regions where it believes it can win. [2][5]

The finances behind the restructuring are significant. HSBC aims to free up US$1.5 billion in investable capacity in its priority markets by exiting non-accretive operations. As of October 2025, HSBC has announced 11 exits, which collectively represent about half of the US$1.5 billion target. [4][6] Part of that effort includes selling its Bahrain consumer banking operations (≈76,000 retail customers), exiting business banking in the US, and eliminating roles in underperforming investment banking segments. [1][2][3]

Strategically, HSBC’s shift aligns with wider structural forces. Gulf economies such as Saudi Arabia and the UAE are undergoing large-scale economic transformation (Vision 2030, sovereign wealth fund activity, infrastructure build-out). HSBC appears intent on being one of the main international banks facilitating that flow of capital, talent, and deals. However, the bank faces regulatory constraints—AML compliance problems in Switzerland led to forced exits of high-risk clients; competition from local and regional rivals; and macro risks such as geopolitical instability, currency risk, and interest-rate adjustments. [5]