HSBC has appointed financial chief Georges ElHedery as its new chief executive, handing the reins to a global banking veteran as the bank braces for renewed tensions between the United States and China.
El Hedery, who takes up the role in September, will succeed Noel Quinn, who suddenly announced in April that he was stepping down after an “intense” five years at the helm.
The move continues HSBC’s long tradition of appointing insiders to chief executive positions, including Quinn, who began his career in 1987 at the bank when it was known as Midland.
ElHedery joined HSBC in 2005 and has held various roles, including co-chief executive officer of Global Banking and Markets, and head of HSBC’s Middle East, North Africa and Turkey regional operations from 2016 to 2019.
He began his career at Paribas in Tokyo in 1997 and was hired by the bank after spending four years at Goldman Sachs in the early 2000s.
His latest promotion to CEO of HSBC comes just 18 months after he was named chief financial officer in January last year.
HSBC said El Hedery’s appointment was the result of a “orderly and robust succession process” that considered external candidates. HSBC Chairman Mark Tucker, who led the search, said El Hedery was an “outstanding candidate” with a track record of “driving growth, delivering simplification and containing costs.”
The Lebanon-born, Mandarin-speaking banker has also been praised by his bosses for his “deep international perspective”, which is likely to help him navigate new tensions between Washington and Beijing.
The bank, which makes most of its profits in Asia, will be sensitive to any aggressive rhetoric from former President Donald Trump and his recent running mate, J.D. Vance, if they win the U.S. presidential election in November.
Commenting on El Hedery’s appointment, Tucker said: “We look forward to working together as he leads HSBC into its next phase of development and growth.”
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Quinn will lead HSBC for the next six-and-a-half weeks, remaining on standby to support El Hedery’s transition until the end of the current chief executive’s gardening leave on April 30 next year.
The announcement came two weeks before HSBC reports second-quarter results that could reveal worries about slowing growth in China and the start of a cycle of interest-rate cuts that will put pressure on the bank’s net interest income. But a recovery in demand for investment-banking services that is buoying Wall Street rivals could help offset some of those concerns.
HSBC said its pre-tax profit for the first three months of 2024 fell 1.8% to $12.7 billion (£10.1 billion), but was better than analysts had forecast and will enable it to return more cash to investors. Revenue rose 3% from the first quarter to $20.8 billion.
Quinn’s departure marks the end of a five-year stint as head of HSBC, having been promoted to the role on an interim basis following the ouster of previous boss John Flint after just 18 months in the role.
Meanwhile, Mr Quinn has steered the bank through the pandemic, cutting 35,000 jobs to save £3.5 billion a year, fending off demands from largest shareholder China Ping An Bank to spin off HSBC’s profitable Asian operations and appeasing some critics by selling and downsizing some of its global operations, including in Canada and France.
Mr ElHedery’s promotion comes with a benefits package of a base salary of £1.38 million per year, a fixed allowance of £1.7 million and a pension allowance of £137,600. Mr ElHedery will also be eligible to receive an annual bonus of up to 215% of his base salary and a long-term incentive bonus plan worth 320% of his salary.
“I look forward to working with the company’s talented team to deliver exceptional value to clients and investors by driving strong performance on a sustainable growth trajectory,” said ElHedery.
