HSBC is to revamp its investment bank under the division’s new joint heads, John Studzinski and Stuart Gulliver. A third of the workforce will be cut from the equities side.

HSBC, the UK’s biggest bank, which hired Mr Studzinski from Morgan Stanley in a fanfare of publicity this year, is to scale back on trading shares on behalf of clients and is to build up a proprietary trading division.

The restructuring will lead to 450 job cuts worldwide from a total headcount of 1,500 in equities. The bank, renowned for paying staff frugally, is now preparing to hire selectively so as to increase revenue from trading on its own account.

The bank also outlined plans to expand its mergers and acquisitions business in New York. Mr Studzinski said that HSBC aimed to be one of the top ten banks for deal-making in North America within five years. An estimated 30 managing directors in HSBC’s advisory division have already been axed under the new management.

Mr Studzinski said: “We have no New York presence, which we are going to rectify.” He would not be drawn on dates for the expected revamp of its New York operation.

If the bank does embark on a recruiting spree on Wall Street, it will have to compete for talent with high-paying American firms.

Both Mr Studzinski and Mr Gulliver said that they had considered slimming back the investment banking division to concentrate on the debt markets but had decided that the division needed to offer a full range of services. HSBC’s investment bank astonished the City in 2001 by refusing to pay bonuses to its bankers. The bank’s decision prompted a number of senior staff to join its rivals.