All material subject to strictly enforced copyright laws. © 2022 Euromoney Institutional Investor PLC group
Derivatives

HSBC Aims To Take On Major Equity Players

HSBC is preparing a major push into the equity derivatives market and will add up to 15 professionals in Paris and sales professionals in London to staff the efforts.

HSBC is preparing a major push into the equity derivatives market and will add up to 15 professionals in Paris and sales professionals in London to staff the efforts. Although HSBC's previous attempts to break into this market have floundered, Mike Powell, head of global markets-Europe, believes the bank will succeed this time because it reorganized along global lines and has made a significant commitment in terms of salaries and infrastructure.

The move, which follows HSBC's aggressive expansion into foreign exchange options last year, will be based out of Paris because the bank already has an infrastructure in place there from its purchase of CCF in early 2000. "The focus will be very much on structured products," said Jerome Ferracci, head of equity derivatives in Paris.

Ferracci explained HSBC has a huge potential client base for equity derivatives and structured products, ranging from clients at HSBC Private Bank to its retail clients. He is responsible for a 40-strong team in Paris.

Several rivals expressed skepticism that HSBC can establish a tier-one equity derivatives operation, given the failure of previous attempts. "HSBC always seems to suffer from internal political problems," said one rival structurer. He conceded, however, that HSBC is more likely to succeed this time if it pays up for top talent.

One City headhunter, however, explained it would likely be hard to sell the story to bankers because HSBC has a history of not committing sufficient resources to strategic initiatives. In particular, it did not pay bonuses to most of its investment banking staff several years ago (DW, 2/25/02). Ferracci conceded it has been hard to recruit bankers, but thinks potential hires will realize upper management have given this effort their backing.

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree