Indian-origin Pam Kaur is HSBC’s first female Chief Financial Officer in its 160-year history

HSBC Holdings said on Tuesday it would combine some of its commercial and investment banking operations in a major overhaul under new CEO Georges Elhedery, which will see it cut costs while trying to improve returns.

A new leadership structure, which includes the appointment of Pam Kaur as the lender's first female Chief Financial Officer in its 160-year history, would "unleash our full potential and drive success into the future," Elhedery said in a memo to staff.

Kaur, 60, takes over as CFO having served as HSBC's chief risk and compliance officer. She joined the bank in April 2013 as group head of internal audit, according to Reuters.

According to reports in sections of the Indian media, Kaur holds an MBA in Finance and a BCom (Hons) from Punjab University in India, and  is a Fellow of The Institute of Chartered Accountants in England and Wales.

Kaur was Global Head of Group Audit for Deutsche Bank; Chief Financial Officer and Chief Operating Officer of the Restructuring and Risk Division, Royal Bank of Scotland Group plc; Group Head of Compliance and Anti-Money Laundering, Lloyds TSB; Chief Compliance Officer, Citigroup International; Global Director of Compliance, Global Consumer Group, Citigroup; and non-executive Director of Centrica plc. She also serves as a non-executive Director of Abrdn plc.

In other key management changes, Greg Guyett, CEO Global Banking and Markets, will assume a newly created role of Chair, Strategic Clients Group.

The lender's Europe head Colin Bell, once seen as a potential candidate for the CEO role, is leaving the bank, an internal memo said, as is Middle East head Stephen Moss.

HSBC, which employs about 214,000 people globally, has been removing duplicate roles for years and reducing its businesses in Western markets such as the United States, France and Canada as it focuses on Asia and markets where it has scale.

Four business lines

The group is carving up its operations into four business lines, namely UK, Hong Kong, corporate and institutional banking, and wealth banking.

The overhaul sees Elhedery tackle one of HSBC's most intractable problems, the Reuters report adds.

Its commercial bank, which serves the lender's more than 1.2 million business customers from startups to major corporations, has long held the potential to turbocharge profit if those customers could be persuaded to buy more products.

Executives in that division, however, have sought to protect their clients from cross-selling efforts by investment bankers in HSBC's Global Banking division, sources at the bank have previously said.

By combining the two divisions – except in Hong Kong and the UK – into the new corporate and institutional division, Elhedery hopes to drive closer cooperation and deliver on the lender's recent publicly stated focus to cross-sell more products to internationally focused customers.

HSBC did not say what the projected cost savings might be or indicate how many jobs would be affected, but more details could emerge when the bank reports third-quarter results on Oct.29.

The new corporate and institutional banking unit will house a newly combined commercial banking and global banking and markets business, and Western wholesale banking businesses, including Europe and the Americas.

According to CNBC, HSBC plans to divide its operations between an “Eastern markets” branch, reuniting Asia-Pacific and the Middle East, along with a “Western markets” division, comprising the non-ringed-fenced UK bank, the continental European business and the Americas.

HSBC's shares were little changed in Hong Kong trade, down just 0.1%. The reaction in London was similarly muted, with the stock down 0.4% in line with the FTSE 100 index.

"The announcement today is just moving around different parts of the group, with no change to the big picture," Ben Toms, an analyst at RBC Capital Markets, said.

"The real question that the market is waiting to hear about, given that the bank is searching to cut costs to offset topline pressure, is which parts of that Group could be next on the chopping block, and how much will this restructuring cost the bank?"