HSBC Holdings Plc $HSBA (+0,01 %)Europe's largest bank, is considering outsourcing part of its large trading business, according to a Bloomberg report. Executives at the bank are finding it increasingly difficult to justify the technology investments needed to keep up with larger rivals. The report cites people familiar with the matter.
Preliminary discussions have already been held about transferring some of HSBC's bond trading order volume to an external market maker. The move could save HSBC millions of dollars in IT costs associated with running trading desks around the world.
The bank is open to partnerships with companies such as Citadel Securities and Jane Street Group. However, discussions are still at an early stage and there is no guarantee that they will lead to an agreement. Representatives from HSBC, Citadel Securities and Jane Street declined to comment on the matter.
HSBC's willingness to consider such a deal suggests that even systemically important banks with extensive Wall Street operations are struggling to make the necessary technology investments to compete effectively in the trading business.
