HSBC chief executive ousted after just 18 months
LONDON/HONG KONG: HSBC Holdings Plc yesterday announced the shock exit of chief executive officer John Flint, but denied talk of a management split as it also axed 4,000 jobs and warned of dark clouds on the horizon.
The London-headquartered lender gave no reason for Flint’s sudden departure after just 18 months in the job, but said there was “no personal clash”, adding it needed a change at the top.
Asia-focused HSBC also revealed it would axe 2% of its global workforce, or roughly 4,000 mostly management jobs, in a new restructuring aimed at weathering global turmoil.
“HSBC Holdings Plc announces that John Flint has today stepped down as group chief executive and as a director by mutual agreement with the board,” read a statement.
The exact amount Flint will get as a pay-off remains unknown until he leaves.
The surprise news came shortly before HSBC reported first-half net profit up 18.6% at $8.5 billion from a year earlier, helped by a surge in retail banking and Asia revenues.
“In the increasingly complex and challenging global environment in which the bank operates, the board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us,” said chairman Mark Tucker.
Addressing rumours that Flint was pushed out after a management bust-up, Tucker later told reporters that there had been “no personal clash” and “no disagreement over strategy”.
Flint, 51, who has spent three decades at HSBC, was keen to lower costs with HSBC facing the double uncertainties caused by the US-China trade war and Brexit.
“I have agreed with the board that today’s good interim results indicate that this is the right time for change, both for me and the bank,” he said.
Flint replaced Stuart Gulliver, who had embarked on a huge restructuring programme to axe 50,000 jobs and exit core markets.
Gulliver also decided to switch 1,000 jobs to Paris from London owing to Britain’s looming departure from the European Union.
HSBC said it would look both internally and externally for a new leader and that Noel Quinn, head of the commercial banking division, would be interim CEO in the meantime.
“We suspect that any new CEO is still more likely to be internal, but will need a more dynamic approach to improving underperforming areas of the business,” analyst Ed Firth at broker KBW told Reuters.
HSBC added that it planned a buyback of shares worth up to $1 billion.
Prior to the latest buyback announcement, HSBC had purchased more than $6 billion of its own shares since 2016.
“The outlook has changed,” the bank said. “Interest rates in the US dollar bloc are now expected to fall rather than rise, and geopolitical issues could impact a significant number of our major markets.”
HSBC added: “In the near term, the nature and impact of the UK’s departure from the European Union remain highly uncertain.
“We are managing operating expenses and investment spending in line with the increased risks to revenue.”
In late morning trade in London, HSBC shares slid 1.3% to 637.70 pence on the FTSE 100 index, which was down 1.9% overall.