Friday , October 7 2022

An HSBC flight attendant, Flint is leaving suddenly after just 18 months in the role



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HONG KONG / LONDON: HSBC has announced the shocking departure of CEO John Flint after just 18 months in the role, saying the bank needs a change at the top to address a "difficult global environment".

Flint's exit, which a person familiar with the matter said was the result of differences in execution of its strategy, was announced early Monday along with HSBC's half-year results, which were scheduled to release later in the day.

The departure comes as Europe's largest bank becomes pregnant with capital, including escalating trade war between China and the US, a softening cycle of monetary policy, concern in the key Hong Kong market and uncertainty over Brexit.

HSBC Hong Kong shares fell 1.5% after the lunch break in the market, while the broader market was down 2.9%.

The stock fell even as the lender raised a 16% level of half-year profit and showed a buyout of up to $ 1 billion, defying some analysts' expectations that it might slow down a strategy to return extra capital to investors.

Flint, a 51-year-old, headed the wealth and wealth management business at HSBC before taking over as CEO in February 2018. His appointment was the first major decision taken by the bank's first outside appointee, Mark Tucker, who came in. board at the end of 2017.

"In the increasingly complex and challenging world environment … the board believes that change is needed to meet the challenges we face and to capture the very significant opportunities ahead of us," Tucker said in a statement.

London-based HSBC, which makes more than 80% of its profit in Asia, said the board will consider internal and external candidates for the new CEO. Noel Quinn, the head of its global commercial banking unit, will be acting CEO.

While the bank did not specify the reason for Flint's sudden departure, a person familiar with the matter said it was the result of differences of opinion between Flint and Tucker about the pace and outcome of the strategic execution.

The main difference stemmed from Flint's smoother approach to cutting spending and setting revenue targets for senior managers to accelerate profit growth, the man said, declining to be named due to the sensitivity of the matter.

A spokesperson for HSBC in Hong Kong declined to comment.

Daniel Tabbush, an independent banking analyst who publishes his research on SmartKarma, said: "I can only guess that he (Flint) was down on numbers. What might happen as well, but it is unknown to know for sure is that he may have been trying to get through the real thing. change and this has been bitter. On the surface it doesn't look good and especially for such a short tenor as general manager. "

When elected as CEO, Flint was regarded by HSBC executives as a safe option, having been at the bank since 1989 and has worked across most of its companies. The first 14 years of his HSBC career were spent in Asia.

Demonstrating its strategy at the bank's caucus in June last year, Flint has proposed planning to invest $ 15- $ 17 billion in the next three years in areas including technology and China.

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HSBC's pre-tax profit for the first six months of 2019 rose to $ 12.41 billion from $ 10.71 billion in the same period a year earlier, aided by growth in Asia's retail banking and revenues.

The bank marked the risk to its business from the US-China trade war and from changing the interest rate cycle.

The imposing tariff war between the world’s two largest economies has affected commercial focus banks such as HSBC and rival Standard Chartered, which last week warned of an impact on their business customers from the rising tensions.

"The outlook has changed. Interest rates in the US dollar bloc are now forecast to decline rather than increase, and geopolitical issues could hit a significant number of our major markets," HSBC said in its earnings report.

The bank "managed operating expenses and investment expenses in line with the increased risks to revenue," it said.

Ahead of the latest buy announcement, HSBC has purchased more than $ 6 billion of its own shares since 2016.

Analysts have been watching closely to see if the bank will announce a recent buyout, as failure to do so would be read as a sign of cautious management by HSBC. – Reuters

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