HSBC boss in shock exit as bank warns of ‘challenging’ times

Shoaib Ur Rehman August 5, 2019

HONG KONG: HSBC on Monday announced the shock exit of Chief Executive John Flint, as the bank giant revealed decent first half profits but warned of “challenging” geopolitics.

The London-headquartered lender gave no reason for Flint’s sudden departure after less than two years in the job, but said it needed a change at the top and warned investors of difficult times ahead.

“HSBC Holdings plc announces that John Flint has today stepped down as Group Chief Executive and as a Director by mutual agreement with the board,” read a statement.

“Although not carrying out his day-to-day duties after today, he remains available to assist HSBC with the transition.”

The exact amount Flint will get as a payoff remains unknown until he leaves, HSBC added.

The surprise news came shortly before HSBC reported first-half net profit up 18.6 percent at $8.5 billion (7.6 billion euros) from a year earlier — but cautioned over dark clouds on the horizon.

“In the increasingly complex and challenging global environment in which the bank operates, the board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us,” said Chairman Mark Tucker in comments that hinted at a forced departure.

Flint, 51, who has spent three decades at HSBC, was keen to lower costs with the Asia-focused bank facing the double uncertainties caused by both the US-China trade war and Britain’s impending departure from the European Union.

“I have agreed with the board that today’s good interim results indicate that this is the right time for change, both for me and the bank,” said Flint.

HSBC said it would look both internally and externally for a new leader and that Noel Quinn, head of the commercial banking division, will be interim CEO in the meantime.

“Although not carrying out his day-to-day duties after today, he (Flint) remains available to assist HSBC with the transition,” the bank said in a statement.

The move comes just weeks after its US chief Patrick Burke retired following a reorganisation of its North American business.

Flint’s departure came despite good results announced on Tuesday with pre-tax profit of $6.2 billion for the second quarter.

The bank also said it would soon begin a buyback of its shares worth up to $1 billion, according to a statement.

But there are headwinds on the horizon.

 

– ‘Outlook has changed’ –

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In Asia — which is acutely vulnerable to the ongoing trade war between Washington and Beijing — the bank said the outlook “is less certain”.

Brexit was also weighing on the bank’s future.

“The outlook has changed. Interest rates in the US dollar bloc are now expected to fall rather than rise, and geopolitical issues could impact a significant number of our major markets,” the bank said.

“In the near term, the nature and impact of the UK’s departure from the European Union remain highly uncertain.

“We are managing operating expenses and investment spending in line with the increased risks to revenue,” the Asia-focused firm said.

In early morning London deals, HSBC shares slid 0.8 percent to 641 pence on the FTSE 100 index, which was down 1.8 percent in value overall.

Copyright AFP (Agence France-Press), 2019
 

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