HONG KONG: HSBC said on Tuesday its Chief Executive Noel Quinn will retire – a surprise departure by its hard-nosed leader of five years who has overseen a sweeping series of asset sales across the globe.
The Asia-focused bank said in a statement it has launched a formal process to find a successor.
Chief Financial Officer Georges Elhedery, appointed to the No. 2 role last January after a sabbatical before which he headed the bank’s markets business, is likely the leading internal candidate for the job.
Quinn, 62, has restored momentum to the bank’s profit and share price by getting rid of or slashing in size underperforming businesses, including the lender’s retail banking businesses in the U.S. and France, its entire Canadian subsidiary and units in smaller markets such as Argentina.
HSBC’s shares, which have gained roughly 30% during his tenure, rose about 1.3% and touched a nine-month high in the afternoon session in Hong Kong.
“I think shrinking businesses in Western markets such as the U.S., Canada and Europe has been a good move for HSBC at the same time as boosting the group’s Asian business, said Simon Yuen, founder of Hong Kong-based Surich Asset Management, which is an HSBC shareholder.
“We do hope that the next CEO would layout more plans, execution-wise, to further increase the bank’s businesses in Asian countries,” he said.
Quinn will remain CEO until his successor starts in the role, and has agreed to remain available through to the end of his 12-month notice period expiring on April 30, 2025, to support the transition.
“I’ve held intensive leadership roles since I took on a commercial bank role in October 2008 so I’m personally ready for a change,” Quinn told reporters on a conference call.
“It’s also a natural inflection point for the bank, as it comes to the end of the current transformation phase. It’s an ideal time to bring in leadership to move the bank forward over the next five years.”
HSBC Chairman Mark Tucker said the bank was aiming to complete Quinn’s succession process by second half of this year.
“He (Quinn) first informed me of this earlier this month”, Tucker said of the timing of Quinn’s decision to step down, adding that the decision was Quinn’s own and that the board supported it.
NAVIGATING CHALLENGES
Quinn, who joined HSBC in 1987, was named the chief executive of the bank, which makes most of its revenues and profits in Asia, in March 2020, after serving as an interim CEO following the surprise ouster of his predecessor.
He played a crucial role in navigating challenges during and after the coronavirus pandemic, as well as heightened geopolitical tensions that weighed on the bank’s key market, China.
He also won a major showdown with the bank’s No. 1 Asian investor, China’s Ping An Insurance, which ran a multi-year campaign to try and get HSBC to spin off Asia business, which ended in defeat at the bank’s shareholders meeting last year.
HSBC also faced criticism in recent years from Western lawmakers over its dealings with China amid growing geopolitical tensions. Hong Kong is HSBC’s single largest market globally.
HSBC reported pretax profit that came in at $12.7 billion, slightly ahead of forecasts, for the quarter ended March versus $12.9 billion a year earlier, as it struggles to cope with rising costs from expansion in Asia.
The London-headquartered bank also announced $3 billion worth of share buybacks on top of $2 billion in share purchases announced in February.
The bank said it continued to target a return on average tangible equity in the “mid-teens” for 2024, with banking net interest income of at least $41 billion, dependent on the path of interest rates globally. – Reuters