Following the latest update, MPs focused on UK-China relations say they are concerned that the split could further tilt HSBC’s centre of gravity away from the UK, making it harder to scrutinise the bank’s Eastern operations.

HSBC’s biggest investor, Ping An, has previously called for it to spin off its Asian business while it has also faced scrutiny for freezing the accounts of campaigners in Hong Kong.

Alicia Kearns MP, a shadow minister for foreign affairs, said: “HSBC’s claims that this is all in the name of simplification, but we know HSBC has faced pressure from Ping An to separate its Asian operations to allow for greater autonomy from UK regulators.

“It rightly faced fierce criticism for freezing the accounts of pro-democracy Hong Kong activist Ted Hui and his family after they fled to the UK in 2021 – so one cannot help but wonder whether this move is not to ‘simplify’ its structure but instead to evade scrutiny.”

Sir Iain Duncan Smith, a UK co-chair of the Inter-Parliamentary Alliance on China who has campaigned against HSBC bank account freezes in Hong Kong, also said he was concerned about the move.

“The question is whether we still be able to raise questions or whether they will be sent back to us and told that they can’t deal with this because it has nothing to do with them.

“I would certainly seek reassurances that this would not be the case and that they’re not going to start obeying what I could call illegal demands from the Chinese government.”

Little detail was given on Tuesday about how the Eastern and Western divisions will be governed, although the bank will remain regulated by the Prudential Regulation Authority in the UK.

Mr Elhedery and Ms Kaur will also remain based in London. Eastern markets will encompass territories such as India, Singapore, the Middle East – making it broader than just China and Hong Kong.

HSBC declined to comment.

Alongside the geographic shake-up, 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 will see HSBC consolidate its commercial banking operations, excluding the UK and Hong Kong, with its global banking and markets business.

The changes take effect from 1 January 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 and criticism of its treatment of Hong Kong dissidents as well as questions over a change in UK and US relations with the Asian superpower.

HSBC, which was founded in 1865 by Scottish expatriate Thomas Sutherland, 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 Tory government as a result of human rights clashes and Beijing spying allegations.

David Lammy, UK foreign secretary, also 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 November 4.

Republican candidate Donald Trump 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.

The bank argued at the time that it “supports all laws that stabilise Hong Kong’s social order”.

Since the rule was introduced it has frozen the bank accounts of various pro-democracy activists and denied pension payouts to Hong Kong residents who have fled to Britain.

The All-Party Parliamentary Group on Hong Kong last year accused the FTSE 100 bank of “doing the dirty work of the Chinese Communist Party”.

HSBC said it had to obey the law and rules of the regulators where it operated.

HSBC also had to fend off a shareholder rebellion from Chinese insurer Ping An, its largest shareholder, who demanded the bank split off its western business and focus on China.

The insurer argued that a break-up would give HSBC’s Asian business more autonomy, especially from UK regulators which in 2020 pressured the bank to cancel its annual dividend because of the pandemic.

HSBC makes most of its money from Asia, after recording more than $16bn in profits from China and Hong Kong last year – more than half of the $30bn recorded group wide. The UK only accounted for $8.3bn.

The £120bn lender has also come under pressure from investors who argued that too much focus remained on London and the bank should relocate its headquarters to Asia.

Mr Elhedery on Tuesday said: “The new structure will result in a simpler, more dynamic, and agile organisation as we focus on executing against our strategic priorities, which remain unchanged.

“By making these changes, we can better focus on increasing leadership and market share in those businesses which have clear competitive advantage and the greatest opportunities to grow.”

The overhaul follows reports that Mr Elhedery was considering cost cutting measures which could save up to $300m by reducing top management layers.

HSBC, which employs about 214,000 people globally, has been stripping out duplicated roles for years to streamline management and lower costs.