HSBC Explores Outsourcing Fixed Income Trading to Revamp Operations

HSBC is contemplating outsourcing aspects of its fixed income trading to third-party firms such as Citadel Securities and Jane Street Group. Currently in preliminary stages, the move is part of CEO Georges Elhedery's broader restructuring efforts to cut costs. The bank aims to streamline operations amidst increasing competition from non-bank market makers.

HSBC is considering outsourcing some of its fixed income trading order flow, as reported by Bloomberg News. Sources indicate that the British banking giant is in early discussions with firms like Citadel Securities and Jane Street Group to handle technological and analytic processes, along with order execution.

This potential move aligns with HSBC's broader restructuring strategy under its CEO, Georges Elhedery, who assumed the role last July. Since then, Elhedery has been actively trimming senior positions and reshaping business units as part of a wider cost-cutting initiative.

The possible outsourcing deal highlights the growing trend of banks losing ground to non-bank market makers that are more adept at leveraging technology. HSBC, Citadel, and Jane Street have all refrained from commenting, leaving the industry's observers to watch closely for any developments.

(With inputs from agencies.)