HSBC's CEO unexpectedly decides to step down.
Hong Kong - HSBC has revealed that their Chief Executive, Noel Quinn, will step down. Quinn, who has been in the role for five years, has overseen a major restructuring process, selling off various assets worldwide.
In a statement on Tuesday, HSBC stated they were initiating a formal process to find a replacement for Quinn.
It is believed that Chief Financial Officer Georges Elhedery, who was promoted to the number two spot back in January 2023, is the most likely candidate for the top job.
Under Quinn's leadership, the bank has seen increased profits and an improved share price. This is due to the selling off or downsizing of underperforming businesses, such as their retail banking operations in the U.S. and France, their entire Canadian subsidiary, and units in smaller markets like Argentina.
Following the announcement, HSBC's shares (HSBC) rose by around 1.3% and reached a nine-month high in the afternoon session in Hong Kong.
Simon Yuen, founder of Hong Kong-based Surich Asset Management and an HSBC shareholder, commended Quinn's decision to focus on their Asian business while reducing their presence in Western markets.
"I think shrinking businesses in Western markets like 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 Yuen. "We do hope that the next CEO would lay out more plans, execution-wise, to further increase the bank's businesses in Asian countries," he added.
Quinn will continue as CEO until his successor takes over.
When speaking to reporters on a call, Quinn explained, "I've held intense leadership roles since I took on a commercial bank role in October 2008, so I'm personally ready for a change."
He continued, "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."
Chairman Mark Tucker expressed the bank's aim to finalize the CEO succession process by the second half of this year.
Tucker stated, "He (Quinn) first informed me of this earlier this month," referring to Quinn's decision. "The decision was Quinn's own, and the board supported it."
Battling Challenges
Quinn, who began working at HSBC in 1987, took over as CEO in March 2020 after temporarily replacing his predecessor. During his tenure, he has managed to handle numerous challenges, including those posed by the coronavirus pandemic and heightened geopolitical tensions in China.
HSBC found itself embroiled in clashes with one of its biggest Asian investors, China's Ping An Insurance, who spearheaded a multi-year campaign to force the bank into spinning off its Asian business. However, this culminated in failure at HSBC's shareholder meeting last year.
Recently, the bank has faced criticism from Western politicians regarding its dealings with China amidst growing geopolitical tensions. Hong Kong serves as HSBC's largest market globally.
Despite these difficulties, HSBC reported a minor increase in pretax profit to $12.7 billion for the March quarter, just slightly higher than analyst expectations of $12.9 billion compared with $12.9 billion in the previous year. Plus, they announced an additional $3 billion worth of share buybacks on top of the $2 billion in share purchases revealed in February.
62
March 2020
chief executive
$3 billion
January 2023
Georges Elhedery
Noel Quinn
$12.7 billion
Simon Yuen
Surich Asset Management
inflection point
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Source: edition.cnn.com
