Amid talk of further restructuring at HSBC Holdings PLC ahead of fourth-quarter 2020 results Feb. 23, attention is set to shift to the future of key growth markets for the bank, including the Middle East and North Africa.
The British banking group has a vast global footprint through its five regional divisions. It is set to reveal plans to embark on yet another revamp, which will include significant investments in regions such as Asia, the U.K. and the Middle East to focus on wealth management, according to Bloomberg News. The bank is also set to announce plans to withdraw from consumer banking in the U.S., sources told the Financial Times.
HSBC's MENA unit contributed 4.32% of group pretax income in the third quarter of 2020, a recovery from the previous quarter, according to S&P Global Market Intelligence data. MENA's share of risk-weighted assets was 6.93%, up quarter over quarter from 6.86%, even as the wider group sheds RWAs. The division steadily increased its lending from the third quarter of 2019 through to the half year of 2020, with its contribution to total loans and advances standing at 2.81% in the third quarter of 2020.
Income at nearly all of HSBC's MENA business segments improved on a quarterly basis in the 2020 third quarter, except its global banking and markets segment, where income declined over the period to $112 million from $184 million.
HSBC has said it is considering a retrenchment from the U.S. and French markets, while also planning to cut 35,000 jobs and shrinking its investment banking arm.
The Asian business contributes 49% of HSBC group revenues, Europe 29%, North America 11%, Latin America 6% and MENA 5%, according to bank data.