Reports by Reuters and the Wall Street Journal that HSBC Holdings is revamping management of its under-performing investment banking business, with Stuart Gulliver taking sole charge while co-head John Studzinski moves to a new job at HSBC, may reverberate through to the securities services businesses.
In recent months, the investment bank and the securities services businesses have begun to work more closely, to the extent of considering corporate clients jointly in terms of overall profitability, the development of a holistic investment and corporate banking service, and mutual client referrals – though custody is more often used to subsidise corporate finance relationships than the other way round. Whether this co-operation will intensify or diminish under the new regime remains to be seen.
Relative weakness in the performance of the Corporate and Investment Banking Division of HSBC, to which both businesses belong, may also lead to a squeeze in search of better performance and reduced overhead and investment, which will affect the securities services business.