Hong Kong: The chairman of Europe's largest bank said that only 18 months after the shock, HSBC ousted John Flint from the position of chief executive. Priority areas such as business transformation needed to be accelerated.
The departure of the CEO was the result of a disagreement with Chairman Mark Tucker about Flint's more tentative approach to reducing costs and setting revenue targets for senior managers to maximize profit growth, said a person familiar with the matter.
HSBC on Monday (Aug. Gust) revealed Flint's departure for Flint, with its half-yearly results, as it predicted a bleak outlook for its business, easing the cycle of monetary policy as trade wars between China and the United States increase. , Its key is the unrest in Hong Kong market and Brexit.
HSBC, which accounts for more than 80 percent of its profits in Asia, said that Noel Quinn, head of its global commercial banking unit, will be the interim chief executive.
Shares of HSBC, which was down about 14 per cent during Flint's tenure, fell 1.7 per cent in London at 11.11 GMT (7.11pm Singapore time), though it increased profits by 16% and share buybacks were announced. Up to US $ 1 Billion.
Flint, who previously ran the London-based HSBC retail and asset management business, was selected as CEO in February 2018 by Tucker in the first major decision, who told Reuters:
"This is the right time for change, and it is very important to do so clearly and decisively from a position of strength."
The main difference with Tucker is HSBC's under-performing U.S. It was on Flint's efforts to turn the business around, said a person familiar with the matter. HSBC declined to comment.
Tucker, who became HSBC's first ex-officio chairman, when he joined HSBC's board, said that the search for a new CEO, which would include both internal and external candidates, would take up to a year.
Chief Financial Worker Ewen Stevenson said HSBC would also cut jobs by about 2 percent or 4,000 of its employees this year, adding that it would pay a total of about $ 650 million to $ 700 million in severance costs. And the reductions will be favored by senior managers.
Flint's exit also followed weeks of hostile Chinese media coverage on the role of HSBC in the arrest of Huawei's Chief Financial Men Fisher Meng Wanzhu.
An editorial by China's Global Times on Friday said it & # 39; s warming on the Huawei CFO case & # 39; indicating that HSBC had made a mistake in cooperating with US authorities and could face penalties.
Tucker told analysts at a conference call whether the bank faced blacklisting about Huawei's position in China.
At the time of his appointment, HSBC executives saw Flint as a safe pair of hands and a natural successor to mentor and former CEO Stuart Gulliver.
Outlining its strategy in June last year, Flint plans to invest US $ 15 billion to US $ 17 billion over the next three years in areas including technology and China.
"We remain unclear with the" business as usual "strategy, said broker KBW analyst Ed Fith.
"We suspect that any new CEO is still more likely to be an insider, but a more dynamic approach will be needed to improve the business's performing sector," he said.
HSBC said the US is expected to achieve a target of 6 per cent return on Tat Gable Equity (ROE) by 2020, where it has struggled to scale and compete for years.
That missed target of the US is still below the overall group target of achieving ROE of over 11 percent by 2020.
HSBC led Citigroup's P Michael Roberts to US business in July, in a new attempt to turn it around.
USBUSNESS is "not getting a fair return," Stevenson, HSBC's CFO, told Reuters, adding that the unit was also affected by changes in the monetary policy cycle.
HSBC's investment banking business has also struggled in recent years as it lost senior executives and US rivals saw cash on the domestic stock market boom.
In the first half, HSBC's global banking and markets division saw revenue decline by 3 percent compared to the same period last year.
The risk of living
HSBC's pretax profit for the first six months of 2019 rose to US $ 12.41 billion, up from $ 10.71 billion in the same period a year ago, due to retail banking and Asian revenue growth.
"The interest rate in the US dollar group is expected to fall instead of rising, and geopolitical issues could affect a significant number of our large markets," HSBC said.
The US-China trade war has taken its toll on trade-focused banks such as HSBC and rival Standard Chartered, which last week warned of growing tensions affecting its business customers.
Tucker countered the impact of protests in Hong Kong against the extradition bill, which has evolved in response to the government, saying that HSBC is confident about the future of the Asian financial center.
Analysts were watching to see if the bank would announce a new buyback, failing to do so would have been read as a caution by HSBC management.
Prior to the latest buyback announcement, HSBC has bought more than $ 6 billion of its own stock since 2016.