Amid Asia Pivot and Global Retrenchment, Critics Question Sustainability of HSBC’s New Strategy

HSBC’s new chief executive Georges Elhedery has launched a sweeping cost-cutting campaign aimed at reshaping the global banking giant. With a sharpened focus on core markets—particularly Asia—and the winding down of operations in less strategic regions, Elhedery is seeking to streamline HSBC’s sprawling empire. But as global trade faces fresh headwinds and interest rates remain stubbornly low, critics question whether this strategy offers a real path to growth.

Since stepping into the top role, Elhedery has moved swiftly to execute what insiders call a “pivot-and-prune” model. The bank has announced exits or downsizing in markets such as Argentina, New Zealand, and parts of continental Europe, while simultaneously deepening its footprint in Hong Kong, Singapore, and mainland China.

“Asia is where the growth is,” Elhedery said in a recent earnings call. “To remain competitive and relevant, HSBC must concentrate resources where the return on equity is strongest.”

The bank’s pivot aligns with its historic roots—founded in Hong Kong and Shanghai in 1865—but also reflects the reality of a more fragmented financial landscape. Trade barriers, geopolitical uncertainty, and economic nationalism have created a more volatile backdrop for global institutions. HSBC’s Asia-centric strategy is seen as a bet on the long-term resilience of regional growth, particularly in Greater China and Southeast Asia.

However, the path forward is far from clear. Analysts warn that the bank’s emphasis on efficiency over expansion may limit revenue-generating opportunities. HSBC has already trimmed 2,000 jobs globally this year, with thousands more potentially on the line. Back-office consolidation and automation are expected to save billions—but may also erode service capabilities and brand presence in secondary markets.

“There’s only so much fat you can cut before you hit bone,” said Emily Wharton, a banking analyst at Morgan Leeds. “Without a parallel strategy for revenue growth, HSBC risks becoming leaner but not necessarily stronger.”

Elhedery’s team argues that cost discipline will provide the breathing room to invest in digital innovation, wealth management, and transaction banking—segments where HSBC believes it can achieve scale in Asia. The bank has already increased funding for fintech partnerships and green finance initiatives, aiming to tap into emerging opportunities as Asian economies transition.

Still, macroeconomic conditions could undermine even the best-laid plans. Escalating tariffs between China and Western economies have squeezed trade flows, and subdued interest rates across Asia limit net interest income—a key revenue driver for banks. Meanwhile, rising regulatory scrutiny in China adds further complexity.

Internally, Elhedery is also facing resistance. Senior executives in Europe and Latin America have expressed concern over a perceived “Asia-first” bias, warning that strategic neglect could damage the bank’s global coherence. Meanwhile, some shareholders have raised doubts about whether the new strategy can deliver returns in a short enough time frame.

“It’s a bold vision, but the execution risk is high,” said Tomas Gruber, a London-based investor. “HSBC is trying to do surgery on itself while running a marathon.”

Despite the skepticism, Elhedery remains defiant. In recent remarks to staff, he emphasized that agility, not scale, will define the next generation of banking success. “We’re not retreating—we’re refocusing,” he said.

As HSBC navigates this transformation, one thing is clear: the Elhedery era will be judged not just on cost savings, but on whether the bank can carve out a profitable path forward in a fractured financial world. Growth through cuts is a gamble. Only time will tell if it pays off.