City dismay as HSBC fails to appoint chief executive despite overhaul


HSBC came under fire on Tuesday for failing to appoint a full-time chief executive despite launching its wide-reaching restructuring plan.

The bank has been without a permanent chief executive since the ousting of John Flint last year and has been run by interim boss Noel Quinn since then.

Quinn today unveiled the bank’s third restructuring plan in a decade, but without the CEO role filled, it remains unclear who will be implementing it.

Chairman Mark Tucker deflected questions about the succession issue, saying only that it was an “independent process”.

He added, however, that today’s sweeping strategic review had been Quinn’s work and said: “The board is fully supportive of the plan today.”

Analysts said Tucker was taking his time to get the next chief executive role right, having clearly made a mistake in hiring Flint last time.

Goodbody analyst John Cronin said: “We are staggered that the board has not moved to officially appoint Noel Quinn to the CEO position and we think it can only be a matter of time.”

Interactive Investor’s head of markets Richard Hunter said: “It’s a shame they didn’t name the new chief executive today. It would be a very good time to announce it. Reading between the lines there’s a good possibility they have earmarked this guy for the role.”

Some investors have argued that HSBC is in such dire need of reform that only an outsider would be capable of doing the job radically enough to be successful.

Quinn’s plan went some way to reassure the City that he was the right man for the job, however, targeting $4.5 billion of cost savings with sweeping changes to the way the bank is run.

That will include wholesale cuts to its investment banking arm in the US, London and Paris, a retrenchment from French branch banking and a shrinking of its US retail operations.

Money saved will be ploughed into its fast-growing Asian operations, which Quinn said were set for strong growth despite “short-term” disruption from the coronavirus. HSBC would focus its investment banking work solely on functions assisting its corporate banking clients. This work will be based in London as a global hub.

Quinn said: “This represents one of the biggest and deepest restructuring programmes in our history.”

The bank reassured investors that despite the programme costing some $6 billion to implement in terms of redundancy payments and other costs, it would not have to cut the dividend.But shares fell 6% or 35p at 555p.

Jefferies analyst Joseph Dickerson said the plan was “ambitious and very credible”. HSBC has long been criticised as being too unwieldy and bureaucratic. In a move to address that, Quinn said he would consolidate back-office functions for global banking and commercial banking and put its wealth management and private banking into one division.

High-profile banker Antonio Simoes, once often named as a potential chief executive, will leave his post as chief executive of global private banking.