HSBC makes right call on CEO, three months late
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Updates to add graphic.
By Anshuman Daga
SINGAPORE, July 17 (Reuters Breakingviews) -Continuity is good. That’s the message from HSBC HSBA.L, which on Wednesday picked frontrunner Georges Elhedery as its new chief executive. But the UK-headquartered group’s new boss inherits a series of knotty challenges, and all of them would have been easier to handle had his appointment coincided with incumbent Noel Quinn’s departure back in April.
HSBC’s Chair Mark Tucker has picked the best available candidate. The 50-year-old Elhedery’s nearly two-decade stint at the bank means he has experience handling emerging markets in the Middle East and Africa, while his 18 months as chief financial officer means investors know him and he will have a grasp of HSBC’s $3 trillion balance sheet. Even so, there are gaps: a bank that earns most of its money from Asia would ideally have appointed someone with more direct experience of the region.
China will loom large in Elhedery’s in-tray. Relations with the West will get even trickier if Donald Trump wins November’s U.S. election. Specifically, there’s the question of how to deal with activist shareholder Ping An Insurance 601318.SS. HSBC, which counts Hong Kong as its biggest market, last year defeated the insurer’s push to spin off its Asian business, but Ping An still has a 9% stake.
An equally tricky challenge is devising a plan to tackle slower growth as global interest rates fall. After last year’s record performance, HSBC’s pre-tax profit is forecast to edge lower until 2026, per LSEG data. While the lender earned a strong 16% return on tangible equity in the first quarter, it hasn’t set clear targets beyond this year.
If Elhedery can manage these two areas and preserve HSBC’s valuation around tangible book value, he will be doing a decent job. But two other related factors complicate matters. One is managing relations with Tucker, who has overseen three CEOs in less than seven years and who will have a big say in shaping HSBC strategy. UK corporate governance conventions imply Tucker will be off by 2026, but that’s long enough for him to strongly influence Elhedery’s big ideas.
The other issue is the circumstances of the new boss’s appointment. Given the mess HSBC has made of previous transitions, this one may look relatively smooth. But if Elhedery was the frontrunner, which he’s always seemed, then appointing him in April would have sent a stronger signal of HSBC’s confidence. Instead, the feeling persists that he was merely the best candidate who happened to be available for one of global banking’s toughest jobs.
Follow @anshumandaga on X
CONTEXT NEWS
HSBC on July 17 said Chief Financial Officer Georges Elhedery had been appointed as its new group chief executive, with effect from Sept. 2.
Elhedery, 50, who becomes the banking giant’s third CEO in less than eight years, will replace outgoing head Noel Quinn who announced his retirement in April. While the 160-year-old lender did consider external candidates, it has traditionally appointed its CEO from within.
Lebanon-born Elhedery started his career in banking as a rates trader before joining HSBC in 2005. He led HSBC’s Middle Eastern, North Africa and Turkey region between July 2016 and February 2019 and then also co-led the bank’s global banking and markets unit.
As of 0943 GMT on July 17, HSBC shares were trading at 6.63 pounds, down 0.1%.
Graphic: HSBC’s revenue is set to fall in the next few years https://reut.rs/4f59TY2
Editing by George Hay and Oliver Taslic
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
