HSBC is preparing to award little or no bonuses to some bankers as it adopts a tougher, performance-driven pay model similar to its US rivals, according to Bloomberg. Underperforming staff in investment banking and wealth management — including some managing directors — may be encouraged to leave after bonuses are paid in the coming weeks, according to people familiar with the matter. Final decisions have not yet been made.

The move reflects the strategy of CEO Georges Elhedery, who has pushed to align HSBC’s compensation practices with those of Wall Street firms. Since taking over in late 2024, he has led a major restructuring, shutting down much of the bank’s US and European deals and equity underwriting operations and merging commercial and investment banking. Several senior executives have exited as part of the overhaul.

According to Bloomberg, HSBC said it remains committed to rewarding employees competitively, with pay linked closely to performance.

The bank’s 2024 bonus pool remained flat at $3.8 billion, defying an industry trend toward higher payouts. Some staff, particularly in corporate and institutional banking, were warned to expect lower awards.

While Elhedery’s revamp is expected to deliver $3 billion in savings, it has raised costs in the short term. HSBC’s cost-to-income ratio rose to 49.9% in the first half of 2025, up from 43.7% a year earlier. Still, investors have responded positively, with shares nearly doubling since his appointment in September 2024, though gains trail rivals such as Barclays and Standard Chartered.

HSBC remains Europe’s largest bank by market value, at around £225 billion, ahead of Santander, UBS, and BNP Paribas.

Founded in Hong Kong in 1865, HSBC has strengthened its focus on Asia and the Middle East amid shifting geopolitical risks. The bank is also reviewing options for its Singapore insurance unit, following recent asset sales in Europe and North America, including insurance and banking businesses in the UK, Germany, and France.