Delicate time for HSBC as boss quits
HSBC has launched a hunt for a new chief executive after Noel Quinn unexpectedly stepped down to pursue a better work-life balance. Quinn’s retirement after five years in charge of the lender has triggered a succession battle at one of the world’s biggest banks. It comes at a politically delicate time for the bank, with HSBC increasingly torn between its British headquarters and its profit centre in China.
HSBC chairman Mark Tucker said the bank would look both internally and externally for a replacement for Quinn, who has run the lender since 2019 and was paid £10 million (NZ$21.2m) a year as chief executive.
City sources said HSBC’s finance chief, Georges Elhedery, was the frontrunner to replace the 62-year old Quinn.
Elhedery was promoted to the finance role last year, with Quinn saying at the time that the appointment was part of the bank’s succession planning.
Frenchman Elhedery, 50, recently took a sabbatical to learn Mandarin in a sign he was being groomed for the top job.
HSBC’s wealth management head, Nuno Matos, and global commercial bank head, Barry O’Byrne, who lead the bank’s biggest divisions, are also leading candidates to take charge.
Citi analysts named Lloyds Bank chief Charlie Nunn, OCBC Bank boss Helen Wong and former Standard Chartered banker Simon Cooper as other potential contenders.
Hiring an outsider would break with HSBC’s tradition of promoting from within its own ranks. However, all three of the outsiders named by Citi as potential candidates have previously held senior positions inside HSBC.
Shore Capital analyst Gary Greenwood said: “HSBC has always been a huge bureaucracy. You need a political operator who can come in and navigate that. An internal candidate would have more knowledge of the internal workings of HSBC.”
HSBC is worth nearly £150 billion (NZ$318b) and employs more than 221,000 across 64 countries. With US$3 trillion (NZ$5.1t) of assets, it is almost as large as the entire British economy in GDP terms.
The sprawling nature of HSBC and its deep roots in both China and the West have made it increasingly politically vulnerable as tensions have ratcheted up between China and the West.
The succession battle could reignite pressure on the bank to shift more of its operations to Asia, or to promote an Asian banker to the chief executive job.
Chinese insurance giant Ping An, HSBC’s biggest investor, previously expressed concerns about the lack of senior executives from the Asian side of the business.
HSBC’s top Asian-based executives are Surendra Rosha and David Liao, who co-lead the bank’s Asia-Pacific business. Rosha is from India; Liao was born in Hong Kong.
Ping An, which owns 8.8% of the bank, previously launched an unsuccessful campaign to break up the bank and spin off its Asian business. A source said the headquarters of the group was “not up for debate”.
Quilter Cheviot equity analyst Will Howlett said the bank’s financial performance was likely to placate any demands for change from investors.
He said: “Profits are strong at the moment on higher rates and they’ve done some heavy lifting in terms of pivoting towards Asia. I feel they’re doing enough.”
The bank has not officially hired headhunters butpreviously used Russell Reynolds for its senior recruitment processes. HSBC declined to comment on possible appointments.
Announcing his decision to step down, Quinn said he wanted “to get a better balance for me personally, and for my family, to make sure I can spend more time with them”.
He added: “Doing this job, you have to give 100%, if not 120%, of your energy, your mindset and your time to the role.”
A source added: “People underestimate how taxing running a bank is, especially with the level of regulation. It takes its toll.”
Tucker said: “The process has just started even though we’ve had a succession process in place for many years. We are aiming to complete this by the second half of this year.”
Quinn took over first as interim chief of HSBC after predecessor John Flint lasted just 18 months in the role.
Quinn oversaw a radical restructuring of the bank that involved cutting 35,000 jobs in 2020 as part of efforts to “simplify” its business and improve performance.
Under his watch, HSBC also shifted its focus towards China in an effort to boost growth. He will formally stay in place until next April but will step back from duties once a new chief executive is appointed.
The Birmingham-born banker joined what was then Midland Bank in 1987, and came up through the ranks in the 1990s before taking the helm of the commercial bank in Hong Kong in the mid-2000s.
HSBC made record profits last year and its dividends and share buybacks are at a 10-year high. Quinn said this marked a good moment to bow out.
News of his retirement came as the bank announced that pre-tax profits fell by US$200m to US$12.7b in the first quarter of 2024. – Telegraph Group