HSBC CEO quits

Global bank HSBC announced on Monday its CEO John Flint had resigned "by mutual agreement with the board."

"I have agreed with the board that today's good interim results indicate that this is the right time for change, both for me and the bank," Flint told reporters.

Noel Quinn, head of HSBC's commercial banking unit, steps in as interim chief executive and one of the biggest jobs in banking, while the lender finds a replacement. 

Addressing rumors that Flint had been pushed out after a management row, Mark Tucker, the bank's chairman, told reporters there had been "no personal clash" and "no disagreement over strategy."

"In the increasingly complex and challenging global environment in which the bank operates, the board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us," said Tucker.

In the statement the bank said there was "an increasingly complex and challenging global environment linked to lower US interest rates, global trade war, prospects of a no-deal Brexit in the UK and unrest in Hong Kong."

Wrong man for the job?

But analysts said the board of directors has been frustrated at the slow pace of change at HSBC since Flint came on board in February 2018, in particular attempts to cut wage costs and restructure operations in the key North American markets. 

The news came after US chief Patrick Burke's recent retirement following a reorganization of the bank's North American business.

The board had reportedly been under pressure to find an outside candidate to bolster the bank's public image in the wake of several scandals and its prosecution agreement with the US Department of Justice.

Tucker and HSBC's directors had "clearly lost confidence in [Flint's] ability to navigate the tougher outlook faced by HSBC given the geopolitical and macrouncertainties, structural headwinds for global banks, and digital disruption challenges," Ronit Ghose, bank analyst at Citigroup, told The Financial Times.

News hiding other news

HSBC posted strong first-half results on Monday, up 18.6% at $8.5 billion (€7.6 billion) from a year earlier. HSBC also announced a share buyback of $1 billion and that it would be shedding thousands of jobs.

Ewen Stevenson, chief financial officer, said that up to 2% of the bank's roughly 238,000 employees would lose their jobs this year, with a 4% decline in the bank's wage bill. The layoffs will cost HSBC between $650 million and $700 million this year and should save the bank about the same amount annually.

HSBC's Hong Kong-listed shares were down 1.6% on Monday morning, while the benchmark Hang Seng index was down 3%.

jbh/hg (Reuters/AFP)