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HSBC fired investment bankers on the day they were due to learn their bonus figures and gave no bonuses to many it let go, in a sign of how the bank is taking a more ruthless approach to costs under new chief executive Georges Elhedery. 

The London-based lender told staff in its UK investment banking business last month that they were losing their jobs, having said in January it would shut its mergers and acquisitions advisory work and its equity capital markets business outside of Asia and the Middle East. 

Those conversations took place just as bankers expected to learn how much they would receive in bonuses for work done in the calendar year 2024, three people with knowledge of the matter said. But bankers at vice-president level and above within HSBC’s investment banking unit who had their employment terminated as part of the restructuring received no bonus, the people said. 

“It’s very unlike HSBC,” one of the people said, adding that the bank had “a reputation for looking after [its] people”. The bank declined to comment.

Other investment banks sometimes pay bonuses to those whose positions they terminate as part of restructuring programmes, even if such bonuses are smaller than usual.  

Elhedery has been determined to make significant cost savings at the bank since taking the helm in September. HSBC last month unveiled a goal of saving $300mn in 2025 and cutting $1.5bn from its annual cost base by the end of next year. 

Elhedery had considered exiting investment banking operations in Asia and the Middle East in addition to the retrenchment elsewhere, three people with knowledge of the matter said, though he has not gone ahead with the move. One said investment banking was an important way to maintain high-level relationships with key clients in the region. 

The bank has also cut some investment banking jobs in Hong Kong. Investment banking makes up a relatively small part of HSBC’s business, with commercial and retail banking accounting for larger shares.  

The investment banking pullback is part of a broader overhaul that Elhedery has instigated, which also includes merging two of HSBC’s three main units, cutting a layer of expensive senior bankers and separating operations into “eastern markets” and “western markets” sections, though those have since been renamed. 

Some investment bankers who had been bracing for job losses had nevertheless been expecting to receive a chunk of their bonus, given that it related to work for the previous year, one of the people said.

HSBC has come under pressure to cut costs as the boost it enjoyed from rising interest rates in recent years has tailed off. Income from interest makes up for about half of HSBC’s revenue, but its net interest income fell last year.  

HSBC last month set out a proposed pay package worth up to £15.3mn for Elhedery, which could rise to £19.8mn if the bank’s share price jumps 50 per cent, a structure that gives Elhedery a strong incentive to boost its stock.

That would make him significantly higher paid than his predecessor Noel Quinn, whose total pay package in 2023 — his last full year at the bank — was worth £10.6mn. That was almost double what he had received a year earlier, in large part due to the vesting of a long-term incentive plan.