HSBC (0005) paid a total of US$67.5 million (HK$527 million) in severance last year to lay off 134 of its highest-ranking " risk takers" – the largest number of such senior bankers the group has cut in a single year since the 2008 financial crisis, the Financial Times reported.
The report noted that, after analyzing the bank’s regulatory filings and company accounts, HSBC's layoff scale significantly exceeded that of similar actions taken by other European banks last year.
The number of senior bankers laid off by HSBC last year accounted for approximately 10 percent of the bank's total headcount, the report said. The move follows chief executive Georges Elhedery’s push to restructure the investment banking business, including closing its mergers and acquisitions and equity capital markets advisory operations in the US, the UK, and Europe. Such senior staff are typically concentrated in investment banking and trading divisions.
A source close to HSBC said the reductions were part of a broader trend at the bank and were not limited to investment banking. Elhedery had previously stated that the restructuring targets overlapping positions within the bank.
The report also noted that HSBC's layoffs marked the largest reduction of highly paid bankers among major European banks since the pandemic in 2020. Last year, Spain's Santander and Deutsche Bank had the highest number of layoffs, following HSBC, which cut 49 and 48 risk takers, respectively, while BNP Paribas and Barclays laid off 39 and 32 senior bankers, respectively.
Among last year's departing risk takers, the average severance payment was highest at Société Générale, at €870,000 (HK$7.48 million), followed by Santander at €736,000 and Deutsche Bank at €437,500. Santander paid a banker €8.3 million in severance, the highest single payout in the industry.
The report said that banks reshuffling often target costly senior management for cost savings. In recent years, many European banks have launched large-scale restructurings or reshaped investment banking divisions to adapt to market changes. Although major European investment banks have benefited from market volatility driven by geopolitical turmoil, the recovery in capital markets advisory has been slower, with European transaction activity still lagging behind that in the US.
The report added that while UBS paid the lowest severance in the industry to its laid-off management last year, the bank as a whole cut more than 7,500 employees, with total severance costs reaching US$942 million, up one-third year-on-year, as UBS nears completion of its integration with former rival Credit Suisse. UBS's average severance payout last year was US$125,000.
