*

HSBC ( HSBC ) to focus on Asia and Middle East for M&A and ECM

*

CEO Elhedery leads cost-cutting and shift to Asia

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Analysts question timing amid expected capital markets

growth

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Shares down 0.7% by 1004 GMT

(Updates shares in paragraph 10, adds analyst comment,

background in paragraphs 11-13)

By Sinead Cruise

LONDON, Jan 28 (Reuters) - HSBC ( HSBC ) is to wind down

its M&A and equities businesses in Europe, Britain and the

Americas, a staff memo showed on Tuesday, signalling its biggest

retrenchment from investment banking in decades and an

acceleration of its shift to Asia.

"Our intention is to move to a more competitive, scalable,

financing-led model," Michael Roberts, CEO HSBC Bank said in the

memo seen by Reuters, which said the lender would retain more

focused M&A and Equity Capital Markets (ECM) capabilities in

Asia and the Middle East.

CEO Georges Elhedery is leading a major cost-cutting

exercise

at Europe's largest bank launched after he took the top job

in September.

The sweeping overhaul is aimed at streamlining costs and

improving accountability of performance, as well as a renewed

focus on Asia, where it earns the bulk of its profit.

Analysts at that time questioned the scale of savings

Elhedery could achieve and which parts of the bank would be

affected, given the years of restructuring his predecessors had

attempted and the bank's steadfast ambition to remain a global,

full-service bank.

HSBC ( HSBC ) will keep its debt capital markets and leveraged

acquisition finance operations globally, Roberts told staff in

the memo, which acknowledged how "unsettling" the news would be

for bankers who advise on dealmaking and corporate equity

raising, such as through initial public offerings.

It was unclear precisely how many roles would be cut, or

the likely savings, or how many bankers might be redeployed to

other financing businesses where HSBC ( HSBC ) considers it is better

able to compete with U.S. rivals.

"I've lost count of the number of times HSBC ( HSBC ) has been in

and out of ECM in the UK. It never seems to succeed," Shore

Capital analyst Gary Greenwood told Reuters.

"At the end of the day, these are expensive businesses

to run and if you are not winning the business and generating

the fees then it's easy to lose money."

HSBC ( HSBC ) shares were little changed after the news, down by

0.7% at 819 pence by 1004 GMT, valuing the bank at about 147

billion pounds ($182.9 billion).

Some commentators described the timing of HSBC's ( HSBC )

decision as surprising, given capital markets activity is

expected to grow in the near term, fuelled by expectations of

interest rate cuts and pro-growth policymaking across the West,

in the wake of U.S. President Donald Trump's return to power.

"The bank is being run with medium to long-term view,"

RBC Capital Markets analyst Ben Toms told Reuters.

"Geographically, the move reflects the continued shift

from West to East, where growth and profitability are higher."

HSBC's ( HSBC ) decision to shutter the businesses was earlier

reported by Bloomberg.

($1 = 0.8037 pounds)