Noel Quinn is to retire as chief executive of HSBC Holdings after five years leading Europe's biggest bank, saying the timing of his surprise exit was right as it was "a natural transition point" for the bank and himself.
The Asia-focused bank said it has started the search for his successor, both internally and externally, and hopes to have a new CEO in place during the second half of this year. The leading internal candidate is likely to be chief financial officer Georges Elhedery.
“I spent some time reflecting over Christmas on the journey for the next few years and I felt personally it was time to get a better balance. It’s been a very intensive five-year period, in fact it’s been intense since September 2008, and I wanted to get a better balance personally," Quinn told reporters on a conference call on Tuesday.
Quinn, 62, has implemented a major restructuring since taking over as CEO in August 2019. He has cut jobs, accelerated a shift to Asia, stripped out bureaucracy and sold big businesses in Canada, France and Argentina, and HSBC delivered record profits last year and ramped up distributions to shareholders.
“At the end of the five-year transformation period it’s right to stand back and reflect. The next phase of the journey for HSBC has got to be a multi-phased and multi-year journey, so it’s a natural transition point for the bank, it’s a natural transition point for me," Quinn said.
Chairman Mark Tucker said Quinn informed him of his intention to leave early this month and a succession plan is underway.
"We hope to complete the search and make an appointment in the second half of this year. We’ll move as speedily and efficiently and robustly as we can," Tucker said. He declined to comment on potential candidates.
Elhedery is expected to be a strong candidate. He has been CFO since the start of 2023, and when he was promoted, Quinn said it was "with an eye to long-term succession planning".
Elhedery was previously co-head of global banking and markets, where he ran the markets division from 2019. He took a six-month sabbatical in 2022, which he said was to spend time with family and explore personal interests. He was born in Beirut and began his banking career as a rates trader. After spells at BNP Paribas and Goldman Sachs, he joined HSBC in 2005, moving up the ranks and running operations in the Middle East, North Africa and Turkey for several years.
Q1 momentum
Quinn said he will remain as CEO until a successor is named, and said first-quarter results released on Tuesday showed strong momentum from last year had continued.
HSBC said profit before tax for the three months to the end of March was US$12.7bn, down 2% from a year earlier. The profit included a US$4.8bn gain from the sale of the business in Canada and a US$1.1bn impairment due to the classification of its Argentina business as held for sale. Operating expenses rose 7% compared with the first quarter of 2023. Revenue for the quarter rose 3% to US$20.8bn, aided by higher customer activity in wealth products.
Global banking and markets revenue rose 1% from a year earlier to US$4.46bn, and the unit made a pre-tax profit of US$2.03bn, up 2%. Bond trading revenue dipped 8% to US$324m and FX trading fell 19% to US$971m, but equities trading jumped 78% to US$257m. Investment banking revenue fell 10% year-on-year to US$279m, offset by an 8% rise in banking payments and solutions revenue to US$1.16bn.
The bank said it plans to buy back up to US$3bn of its shares, following the completion of a US$2bn buyback announced in February. It maintained its outlook for the year, targeting a return on average tangible equity in the mid-teens, with banking net interest income expected to be at least US$41bn.
"The timing works"
Quinn was officially appointed CEO in March 2020, but has been at the helm since August 2019 following the ouster of his predecessor John Flint. He has been with HSBC for 37 years. He ran the commercial banking arm from 2015, and before that ran commercial banking for the UK, was director of strategy and development for North America and held a number of roles in the UK at Midland Bank, which HSBC acquired in 1992.
As well as implementing the major restructuring and profit improvement, Quinn has also had to contend with tension in China-US politics and seen off an attempt by Ping An, HSBC's biggest shareholder, to try to force the bank to consider a more radical break-up and other structural reforms.
HSBC's shares rose 2.4% to 684.5p on Tuesday, their highest level since May 2019. The shares are up 4% during Quinn's time in charge.
“It’s been a phenomenal 37 years at the bank, but in that 37 years I haven’t had much of a break and this is a chance to have a break. The timing works," Quinn said.
Quinn was paid £10.6m (US$13.4m) for 2023, up from £5.6m in 2022, thanks to the first vesting from a long-term incentive plan, which paid him £5.2m for the period 2021–2023.
Asked if he will get more time to watch English football club Aston Villa in retirement, Quinn responded: "The only point of difference myself and Mark [Tucker] have had over the past five years is he’s an ardent Chelsea supporter and I’m a Villa supporter. We concluded that debate with a 2–2 draw earlier this week."
Updated story: Adds comments from chairman and CEO, details throughout