HSBC Holdings CEO Georges Elhedery said the conflict in the Middle East and broader ¡°uncertainties¡± are beginning to dent client confidence as investors navigate an increasingly volatile global landscape.

¡°We¡¯re saddened and concerned with what¡¯s happening in the Middle East, and we¡¯re concerned not just with what¡¯s happening, but also with how long this will take,¡± Elhedery said in an interview at an HSBC conference in Hong Kong. ¡°Unfortunately, some of these uncertainties have initially started to weigh on general confidence,¡± he said.

¡°We worry that the continuation of this conflict will have that impact globally way beyond the Middle East,¡± he said, seeing impact on not just in the price of goods, oil and refined products but also on fertilizers and metals.

The London-based lender is among the European banks most exposed to the Middle East, a region that accounts for roughly 4% of its pretax profit, according to analysts at JPMorgan Chase & Co. HSBC also maintains a 31% stake in Saudi Awwal Bank. Since the outbreak of hostilities, some wealthy individuals who had previously relocated to the region have begun evaluating alternative hubs, including Singapore and Hong Kong.

Despite the geopolitical headwinds, Elhedery struck a resilient tone, saying that the bank¡¯s experience managing pandemic-era disruptions has prepared it to pivot quickly once conditions stabilize. He added that the lender has seen only ¡°very benign movement¡± of capital out of the Middle East so far.

¡°I¡¯m reassured that the resilience of our customers and our own resilience are allowing us to look through some of these challenges,¡± Elhedery said, adding that the bank is ready to ¡°push the button¡± and ramp up operations once the conflict subsides.

Since taking the helm in 2024, he has doubled down on his predecessor¡¯s Asia-pivot strategy by taking private Hong Kong subsidiary Hang Seng Bank, a major bet on the Asian financial hub. The U.K.-headquartered lender has exited businesses in Europe and North America.

Elhedery has been driving a major overhaul at the bank. He¡¯s already cut thousands of jobs while selling off some businesses and merging or closing others. The revamp has been welcomed by investors with shares roughly doubling since he took the top job.

Elhedery said that most of the ¡°heavy lifting¡± of the reorganization and simplification is now done.

The executive has also been attempting to drive a cultural change across the bank¡¯s more than 200,000-strong global workforce. HSBC is weighing deep job cuts over the coming years as Elhedery bets on artificial intelligence to shrink middle and back office roles.