HSBC CEO Flint exits abruptly after only 18 months in role
|reuters.com 04 Aug 2019 at 23:38|
HONG KONG (Reuters) - HSBC ( HSBA.L ) announced the shock departure of Chief Executive Officer John Flint after just 18 months in the role, saying the bank needed a change at the top to address “a challenging global environment”.
FILE PHOTO: CEO John Flint of HSBC attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 24, 2019. REUTERS/Arnd Wiegmann
Flint’s exit, which a person familiar with the matter said was a result of differences over execution of his strategy, was disclosed early on Monday along with HSBC’s half-yearly results which had been scheduled for release later in the day.
The departure comes as Europe’s biggest bank is grappling with headwinds including an escalation of a trade war between China and the United States, an easing monetary policy cycle, unrest in the key Hong Kong market and uncertainty about Brexit.
HSBC s Hong Kong shares ( 0005.HK ) fell more than 1.5% in early trade on Monday, while the broader market .HSI was down 2.6%. The stock dropped even as the lender posted a 16% rise in half-yearly profit and unveiled a buyback of up to $1 billion, defying some analysts expectations it might pause a strategy of returning extra capital to investors.
Flint ran HSBC’s retail and wealth management business before taking over as CEO in February 2018. His appointment was the first major decision taken by the bank’s first externally appointed chairman Mark Tucker, who came on board in late 2017.
“The board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us,” Tucker said in a statement.
London-headquartered HSBC, which makes more than 80% of its profit in Asia, said Noel Quinn, the head of its global commercial banking unit, will be interim chief executive.
While the bank did not elaborate upon the reason for Flint’s sudden departure, a person familiar with the matter said it was a result of differences of opinion between Flint and Tucker over the pace and result of the strategy execution.
The main difference arose from Flint’s softer approach to cutting expenses and setting revenue targets for senior managers to boost profit growth, said the person, declining to be named due to sensitivity of the issue.
An HSBC spokesman in Hong Kong declined to comment.
When he was picked as CEO, Flint was viewed by HSBC executives as a safe option as he had been with the bank since 1989 and worked across most of its businesses. He spent the first 14 years of his HSBC career in Asia.
Outlining his strategy at the helm of the bank in June last year, Flint set out plans to invest $15-$17 billion in the next three years in areas including technology and China.
HSBC’s pre-tax profit for the first six months of 2019 rose to $12.41 billion from $10.71 billion in the same period a year earlier, helped by a surge in retail banking and Asia revenues.
The bank flagged the risk to its business from the U.S.-China trade war and the change in the interest rate cycle.
The tit-for-tat tariff war between the world’s two largest economies has taken its toll on trade-focused banks like HSBC and rival Standard Chartered ( STAN.L ), which last week warned of an impact on its business customers from the escalating tensions.
“The outlook has changed. 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 said in its earnings statement.
The bank was “managing operating expenses and investment spending in line with the increased risks to revenue,” it said.
Reporting by Sumeet Chatterjee in Hong Kong and Aditya Soni in Bengaluru; Editing by Nick Zieminski, Richard Pullin and Muralikumar Anantharaman