CLike Barclays, HSBC executives have also been leaving under dramatic circumstances in recent years. The last one, John Flint, was ousted as chairman by incumbent Mark Tucker, who had appointed him just 18 months earlier. Back in 2010, Michael Geoghegan was summoned to the Goring Hotel to decide whether he wanted to remain as chief executive, as he would not be following the traditional cozy path to the chairmanship. Was told. He quit.
In contrast, Noel Quinn’s departure announcement caused fewer fireworks. At least his explanation was easy to understand. Quinn said the past few years have been “intense” and he wants to do other things, including “strike a better balance between personal and work commitments.” He is 62 years old, has been with HSBC for 37 years, and has probably earned more money (£10.6m last year) than he thought when he joined the former Midland Bank, so it was perfectly wise for him to leave. It seems that there is.
Of course, whether that’s the whole story is another matter. It was an awkward start for Quinn, who had to serve as interim director for seven months before the no-nonsense Tucker appointed him permanent chief executive in 2020. Meanwhile, ambitious former finance director Ewen Stephenson seemed to be under the impression that Quinn would be hanging around. Mr Stevenson stepped down at the end of 2022, reportedly because he believed he would not continue in the top job anytime soon.
Still, Quinn’s timing is admirable. Last year’s excitement was the kerfuffle with Chinese insurance company Ping An, HSBC’s largest shareholder. HSBC wanted to split the bank in two. HSBC definitely won that scrap. No other major shareholders took part in the revolt. Meanwhile, stock prices have finally recovered. A one-third rise is decent for Mr Quinn, but his book valuation is better than that managed by many of his rivals, particularly Standard Chartered. The latest quarterly numbers showed a slight decline in profits to $12.7 billion, indicating no short-term crisis. A $3 billion share buyback helped the mood.
In the longer term, significant uncertainty remains regarding HSBC. The next conflict with the Chinese government is probably only a matter of time. The bank’s existence as a London-regulated lender that makes most of its money in Hong Kong and mainland China may ultimately become unsustainable. The last time HBSC was the target of a U.S.-China conflict in 2021, Quinn quelled the flames (by offering some flippant banker-like comments), but the next decade of geopolitics remains No one knows.
Meanwhile, a strategy to put more capital into expanding operations in China is one bet whose timing may prove to be imperfect. China’s economic growth is slowing and the local real estate market is in turmoil. So far, HSBC has only suffered a dent in the form of a $3 billion writedown on its stake in China Bank of Communications, but this is still in its early stages. There are other reasons to quit if the opportunity arises.
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The battle for succession is likely to widen. While outsiders see finance chief Georges Ergederi as the early frontrunner, insiders say Nuno Matos, the head of wealth management who has had a strong track record, is the person to watch. That is if Mr. Tucker does not choose an outside candidate.
