HSBC CEO states: "As Europe's largest bank, we must break into the global top 5."

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Georges Elhedery, the new CEO of HSBC Holdings, has vowed to drive the restructuring of Europe’s largest bank to ensure its core business areas are ranked among the top five globally.

On Tuesday, HSBC CEO Georges Elhedery defended his sweeping restructuring plans at the Financial Times Global Banking Summit, stating that the decision to close key investment banking businesses in the UK, Europe, and the Americas, though "difficult," is necessary.

He stated:

Some decisions are unpopular, but I am not in this role to be popular.

Elhedery pledged to "double down" on M&A advisory and equity capital market businesses in the Middle East and Asia, believing that HSBC can become the best institution in these markets.

Since Elhedery took office last September, HSBC has restructured its operational architecture, cut layers of highly-paid bankers, and shifted its strategic focus to Asian and Middle Eastern markets.

"Whatever it takes" determination to restructure

At the summit, Elhedery made it clear that HSBC must take a "ruthless" approach to its business portfolio. He said:

We must do whatever it takes. We need to be the best at what we do.

The CEO emphasized that HSBC is "rapidly pursuing restructuring in the spirit of simplification and focusing on strengths." He stated:

In the few areas where we have clearly failed to enter the top 20, we must make ruthless decisions and acknowledge that we shouldn’t be in those businesses.

Since becoming CEO last September, Elhedery has launched a comprehensive restructuring of the UK bank.

Reforms include re-dividing HSBC’s operations into two major units—"East" and "West" (later internally renamed to "Asia and Middle East" and "Europe and Americas"), closing key investment banking business segments, and merging two of its three main business units.

Chairman position remains undecided

HSBC’s board also faces pressure to appoint a permanent chairman as soon as possible to succeed Sir Mark Tucker, who stepped down earlier this year.

Reportedly, after a lengthy recruitment process, former UK Chancellor George Osborne and Goldman Sachs executive Kevin Sneader are seen as leading candidates to succeed Tucker.

Elhedery said that the main duty of a non-executive chairman is to "challenge" him.

He added that while HSBC’s interim chairman Brendan Nelson has decided not to serve a full six-to-nine-year term, Nelson will continue in the role "until the board and nomination committee find a suitable chairman."

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