HSBC has unveiled a sweeping overhaul of its bank separating its UK division from its Asia business amid growing geopolitical tensions between China and the West.

The lender on Tuesday announced that it will be “simplifying” its geographical governance structure, splitting its business into eastern and western markets.

Under the plans, which are being spearheaded by Georges Elhedery, HSBC’s new chief executive, eastern markets will contain the Asia-Pacific region and the Middle East while western markets will contain its UK and continental European and Americas businesses.

It is the first major shake-up by Mr Elhedery, who was appointed in July and is HSBC’s first Mandarin-speaking chief executive.

The bank will also restructure its operations into four distinct business lines: Hong Kong; UK; corporate and institutional banking; and international wealth and premier banking.

The move involves HSBC consolidating its commercial banking operations, excluding the UK and Hong Kong, with its global banking and markets business.

The changes take effect from Jan 1 2025, with further details to be released in HSBC’s full-year results.

It comes amid growing pressure on the bank to move its headquarters to China, growing criticism of its treatment of Hong Kong dissidents and questions over a change in UK and US relations with the Asian superpower.

HSBC is having to navigate a possible shake-up of relations after Sir Keir Starmer’s Government signalled a reset of Britain’s stance towards China. The Government has commissioned a cross-Whitehall review of Britain’s relationship with the country, which suffered under the previous Tory government as a result of human rights clashes and Beijing spying allegations.

David Lammy, the Foreign Secretary, signalled a softer stance after dropping pre-election plans to classify its treatment of the Uyghurs as genocide ahead of meeting Beijing officials last week.

Meanwhile, renewed tensions between the US and China, the two largest economies in the world, remain a fresh possibility following the US presidential election on Nov 4.

Donald Trump, the Republican candidate, has vowed to take jobs from China if re-elected back to the White House by imposing aggressive tariffs on companies which did not move jobs back to the US.

The threat of rising geopolitical tensions between East and West poses problems for HSBC because it must keep both sides happy to do business.

The issue has caused headaches for the lender in the past after it came under fire for supporting a Beijing-backed authoritarian crackdown in Hong Kong in 2020 which banned all anti-government activity.