HSBC’s CEO Steps Down After More Than Four Years

HONG KONG/LONDON—HSBC Chief Executive Noel Quinn unexpectedly said he would retire, leaving one of the world’s largest banks without a clear successor as it navigates geopolitical tensions between the West and China.

Quinn told HSBC’s board earlier this month he planned to leave after more than four years as CEO and decades with the bank. He said he wanted to devote more time to his personal life. He will remain in post until the board designates a successor.

Chairman Mark Tucker said the board has begun a search for internal and external candidates and hoped to name a new CEO in the second half of this year.

One front-runner is Georges Elhedery, who became chief financial officer last year after almost two decades at the bank. Other potential internal candidates include the leaders of its three global business lines: Greg Guyett, head of global banking and markets; Nuno Matos, head of wealth management and personal banking; and Barry O’Byrne, head of global commercial banking.

HSBC occupies a unique role in the global economy, as the world’s biggest lender financing trade and a major conduit for money flowing across borders. It also is one of the few banks that has a sizable presence in two hemispheres, as a big retail and commercial lender in the U.K., as well as across much of Asia.

As such its leaders often play the role of diplomat as much as executive, traveling frequently to meet with politicians and corporate bosses in China and elsewhere in Asia, the U.S. and Europe.

Quinn earned £10.64 million, or about $13.4 million, last year. He is departing earlier than he had previously indicated. He said he accelerated his retirement plans after thinking over his future this past Christmas season, and one factor that influenced his timing was the bank’s financial turnaround.

HSBC’s stock price in London has climbed more than 19% over the past year. Higher interest rates have boosted the amount the bank earns when it lends to businesses and consumers.

For 2023, the bank posted strong profits and paid its largest dividend to stockholders since 2008. Last year, Quinn overcame an attempt by a major shareholder, China’s Ping An Insurance, to split the bank up.

Quinn, formerly the bank’s commercial banking chief, was a surprise pick when he became CEO in 2019, first as an interim replacement for the fired John Flint, then on a permanent basis the following year.

But he has since gained the respect of analysts and colleagues. He steered the bank through the Covid-19 crisis and intensified its pivot to Asia. The bank has retrenched in some big Western markets, including the U.S., Canada and France, while expanding in Asia, where it makes most of its pretax profit.

Quinn has also cut costs, including by reducing staff and office space.

HSBC has a long tradition of picking insiders to run the bank since it was founded in Hong Kong in 1865, but Quinn had to fend off competition from outsiders including Jean Pierre Mustier, former chief executive of UniCredit, an Italian lender.

HSBC has looked outside its ranks for other big names: Tucker, its chairman since 2017, was hired from Hong Kong insurance giant AIA.

Tucker will now get to pick his third CEO. Unlike in the U.S.—where some bank CEOs also serve as chairman—the roles are typically divided in the U.K., and Tucker has a reputation for being particularly strong-willed.

Quinn’s stint has been tumultuous. In 2019, Hong Kong was rocked by mass antigovernment protests. The following year, HSBC and other British lenders canceled dividend payouts at the request of the Bank of England, a move aimed at conserving capital as Covid-19 hit the U.K. hard. The dividend cuts led to to protests from small investors in Hong Kong and an apology from Quinn.

The bank was also caught up in U.S.-China tensions as HSBC cooperated with American prosecutors in a case against China’s Huawei Technologies and during the extradition battle over its finance chief, Meng Wanzhou. In Britain, lawmakers quizzed Quinn about the bank’s stance in Hong Kong.

HSBC came under pressure from Ping An, one of the world’s biggest insurers, which pushed the bank to restructure in Asia, its most profitable segment. HSBC’s shareholders last year overwhelmingly rejected the proposal.

Shares in HSBC fell sharply during Quinn’s early tenure, as Covid-19 ravaged global markets. But they have since rebounded, and are up sharply over the past year.

Quinn said he wanted a better work-life balance and plans to pursue a “portfolio career,” meaning he is likely to hold a range of positions rather than one big job.

“It’s been a phenomenal 37 years in the bank, but in that 37 years I haven’t actually had much of a break, and this is a chance now,” Quinn said. “I think the timing works, having achieved the successful transformation that we set out on.”

His exit was announced alongside HSBC’s earnings Tuesday. The bank made a profit of $10.2 billion in the first quarter—just shy of its record-breaking first quarter last year, and matching analysts’ estimates.

The sale of HSBC Canada added $4.8 billion to its bottom line, and the bank will pay out nearly $4 billion—or 21 cents per share—of proceeds as a special dividend. The one-off payout matches the dividend that the bank canceled, under pressure from U.K. regulators, early in the pandemic.

HSBC took a $1.1 billion impairment on its Argentina business, which it intends to sell. It also unveiled a new $3 billion stock-buyback plan.

Write to Elaine Yu at [email protected]