The UK group has scaled down its investment banking ambitions after the Studzinski era.
When HSBC's mergers and acquisitions bankers sit down for their annual performance reviews in the coming weeks, they may conclude the next phase of their career lies elsewhere.
HSBC's appearance on several of Europe's biggest deals this year has done little to dispel the notion the bank has scaled down its ambitions to be a top M&A house. Bankers who have left in recent months paint a picture of an organisation which has privately abandoned its five-year strategy to build an investment bank with two and a half years left to run.
Managers at HSBC deny this but acknowledge they will have to offer top packages to their bankers to keep them, or risk losing them to better-paying banks. One insider said: "It's a competitive market and the next few months are going to be a crunch time if we are to retain existing people and hire new staff."
They stressed HSBC remained committed to its five-year plan to build a top 10 global investment bank. However, the division is radically different from the one envisaged by former Morgan Stanley dealmaker John "Studs" Studzinski when he arrived to much fanfare in June 2003.
Studzinski's remit was to hire top talent to the division, while Stuart Gulliver, a lifelong HSBC banker, built global markets, which comprised its bigger trading operations. The bank spent about US$500m (€392m) hiring dealmakers from rivals such as Goldman Sachs, Morgan Stanley and Citigroup.
The tide began to turn in August last year when Gulliver said the financial cost of building the investment bank was "largely complete", in a move some said called an abrupt halt to the plan's funding.
Big-name bankers have been leaving HSBC's corporate investment banking and markets division in a steady stream since the start of this year, after what they regarded as a shift in strategy. The hammer blow came in April, when Studzinski quit shortly after a reshuffle of the corporate investment banking and markets division, which saw the corporate finance and advisory unit folded into global banking.
The talk is of an exodus of talent. One former HSBC banker said: "About 30% of the investment banking division has left. Everyone has been interviewing." One head of European investment banking, at a US bank based in the UK's financial district at Canary Wharf, agreed: "We've interviewed about 100 people from HSBC this year."
HSBC denies it is scaling back but admits its plan has changed. Studzinski's vision of a pure advisory house has been scrapped in favour of an integrated model, under which HSBC deploys its balance sheet to finance big transactions and win an M&A role - it is advising and financing German utility E.On on its €37bn (US$47bn) hostile bid for Spanish utilities company Endesa.
One manager said: "We have refined our strategy so we only work on deals where we can add real value in advising and financing. Studzinski wanted to do too much."
The bank has chopped sector teams so that globally it now covers just four - consumer and retail, general industrials, resource and energies, and financial institutions. Other sectors that used to be covered globally, such as telecoms or real estate, now operate on a regional basis or as part of the general industrials group.
The bank's decision to scrap its global technology group prompted the resignation of sector head John Jacobs, while real estate banker Maxwell James left after HSBC disbanded the global sector group in favour of a regional focus one under Richard Cole. The insider said: "In the technology sector we decided we could not win mandates on the back of big financings."
Others to have left include Robin Osmond and Mark Bucknall, whose jobs as co-heads of global of investment banking disappeared under the restructuring, and David Livingstone, head of European investment banking who resigned after his responsibilities dwindled in the new global banking group run by Robin Phillips and, until last week, Mukthar Hussein.
Some of Studzinski's hires have been redeployed. Sean Carney, who ran global telecoms, is now responsible for coverage and product management under Phillips.
The concern of those who have left is that HSBC's retail banking culture has thwarted attempts to build a leading investment bank.
The bank has defended itself against claims it is risk averse, breaking its lending limits to finance E.On's bid for Endesa and launching a global leveraged finance group to provide loans to private equity firms.
One banker said: "The bank was not prepared to be aggressive when it came to backing private equity bids. It was always beaten by rivals because it wouldn't lend big enough amounts on leveraged buyouts."
In the past month, the bank has won three advisory and financing mandates from private equity firms. It is lead arranger for a 4bn (€6bn) loan to Australian bankMacquarie to finance its acquisition of Thames Water and backed a private equity consortium bidding for Télédiffusion de France in the country's biggest leveraged buyout.
The bank then advised Candover and provided debt financing for its €1bn acquisition of the Swedish bed manufacturer Hilding Anders.
Despite the progress, HSBC's standing in the M&A league tables has shown no radical improvement. When Studzinski joined in 2003, it was ranked 16th in European M&A, according to data provider Dealogic. It is now 11th. Its market share of European investment banking fees has dropped from 2.5% to 2.4%. This year, investment banking revenues rose 2% to US$491m (€388m), according to the financial statement for the six months to June 30.
HSBC declined to comment.