HSBC’s various attempts to establish itself as a force in investment banking have met with, at best, limited success – and at worst outright ridicule.
The high profile hiring of John Studzinski, the former deputy chairman international of Morgan Stanley, in 2003 to co-head the corporate, investment banking and global markets division with Stuart Gulliver, was meant to be the beginning of a concerted effort to build an investment banking business to befit HSBC’s position as the world’s then second, now third, largest bank.
Four years on and the push, with ensuing hiring spree, has failed to yield meaningful results, despite the addition of around $2.5bn in operating expenses since 2003. Studzinski departed the bank last year for Blackstone. David Livingstone, the head of investment banking for EMEA, left soon after. Now Daniel Palmer, another Morgan Stanley hire as global head of capital markets, is leaving after three years at the bank.
Bloomberg reports that under Palmer HSBC fell to 19th globally last year in debt and equity underwriting from 14th in 2005, failing to bag a spot on plum deals such as the ICBC listing last October. The bank has also failed to break into the top 10 for M&A advisory, either in Europe or the US.
After Studzinski’s departure last year, HSBC was at pains to emphasise its continued commitment to building its investment banking platform. But amid limited progress, against the backdrop of a bull market for the banks, and with a run of high-profile departures, HSBC will need more than platitudes to convince the City, and more importantly its own staff, that it still means business.