HSBC is reportedly reviewing a perk that covers school fees for bankers in Hong Kong as part of a big overhaul of the bank under chief executive Georges Elhedery.

Europe’s largest bank is considering whether to scrap the perk for new employees or make changes to total compensation, Bloomberg News reported. No decisions have been made yet.

Hundreds of staff in Hong Kong – HSBC’s biggest market – benefit from the subsidy, which costs the lender tens of millions of dollars a year, and is not available in its other hubs around the world, reportedly leading to tension at its headquarters in London.

It is also not offered to staff of Hang Seng Bank, which HSBC acquired in full in January for £10bn and delisted from the local stock exchange.

HSBC’s staff in Hong Kong at mid and top level are entitled to a subsidy that covers 95% of annual school fees up to HK$220,000 (£20,700) for each child in primary school and HK$300,000 a child in secondary school.

International school fees are a huge expense for families in Hong Kong and costs have gone up since the Covid pandemic.

Hong Kong’s largest international school group, the English Schools Foundation, plans to raise tuition fees by an average 4.1% for most of its primary and secondary schools in the next academic year, amounting to HK$600 and HK$720 more each month.

Elhedery, who took over in 2024, has embarked on a shake-up of the banking group including pushing through big cost cuts, exiting certain markets, and separating operations into eastern and western markets. The move briefly prompted rumours of an HSBC break-up, which were later quashed.

In a recent interview with Bloomberg Television, Elhedery said he was “ruthless about killing complexity” in his push to make the lender more simple and agile.

HSBC generates most of its profits in Hong Kong and China, and is doubling down on Asia with the purchase of Hang Seng. It has reportedly been pushing Hang Seng to rid itself of bad debts linked to the property market.

HSBC is the biggest bank in Hong Kong and one of three note-printing lenders. The company was founded in 1865 as the Hongkong and Shanghai Banking Corporation Ltd by Thomas Sutherland, a Scotsman who was working in Hong Kong for a big shipping business. It opened an office in London the same year, and its goal was to finance trade between Europe and Asia.

HSBC has been contacted for comment.