HSBC Holdings Plc’s Chief Executive Officer Noel Quinn is unexpectedly stepping down after nearly 5 years in the job, triggering a search for a replacement at Europe’s largest bank.
The board has begun a formal process to find a successor, and will consider both internal and external candidates, according to a statement Tuesday. Quinn will stay on during this process to ensure a smooth and orderly transition, it said.
During his tenure, Quinn led a series of strategic reviews that culminated in a plan to boost the bank’s investment in its Asian business, while cutting back in developed Western markets such as the U.S. and France. His departure comes as HSBC navigates the rapid deterioration of U.S.-China ties, undermining the company’s yearslong push to expand there.
“Doing this job, you have to give 100% if not 120% of your energy, your mindset your time to the role,” Quinn said on the conference call with journalists. “You can keep doing that, but that doesn’t necessarily achieve the balance in life that I wanted.”
Under his leadership, HSBC’s return on tangible equity has soared and profits touched a record last year. The company’s stock has risen 35% since he took over at the height of the coronavirus pandemic in March 2020, compared with the 53% advance of the FTSE All-Share Index.
The London-headquartered bank on Tuesday also posted a 1.8% drop in pretax profit to $12.65 billion for the first quarter, which topped the $12.6 billion average consensus estimate compiled by the company. The lender also announced a new $3 billion buyback, 50% more than what some analysts were expecting.
HSBC shares were up 2.4% at 8:25 a.m. in London.
Quinn’s unexpected exit “will pave the way for HSBC’s next stage, to capture Asia growth, after the bank streamlined operations by restructuring and sold some businesses” under his watch, Bloomberg Intelligence analyst Tomasz Noetzel said in a note. “The new CEO will most likely need to demonstrate HSBC’s ability to expand non-interest income that was 4% below expectations” in the first quarter.
Quinn’s Tenure
This will be the third CEO search under Chairman Mark Tucker, who took over at HSBC in October 2017.
The first came when he appointed Quinn’s predecessor John Flint as CEO in 2018. He later handed Quinn the reins after he ousted Flint only 18 months after appointing the HSBC veteran to lead the bank amid disagreements over strategy.
In 2022, Quinn said the promotion of former markets boss Georges Elhedery to chief financial officer was part of the bank’s long-term succession planning. At the time, he said his “ambition is to make sure there are no less than three and ideally four to five potential succession options that the board could consider within HSBC.”
Quinn began his banking career at British lender Midland Bank in 1987, which HSBC bought in 1992. He spent the majority of his career at HSBC working for the commercial banking unit.
He began thinking more seriously about departing the bank over Christmas and he ultimately informed Tucker about his intention to retire in recent weeks. Tucker is aiming to wrap up the CEO search by the second half of the year.
Quinn was granted “good leaver” status, meaning he’s still entitled to his deferred awards and they will continue to vest. That status is conditional on him not taking up a role with a defined list of competitors following his retirement, HSBC said in the statement.
“We never felt he looked completely comfortable in the role and suspect that COVID was a particularly brutal period running an international business like HSBC,” Perlie Mong, an analyst at Keefe, Bruyette & Woods, said in a note to clients. Still, she said, his departure is “surprising after only four years in the role, particularly as it took 7 months as ‘interim’ to actually get the job.”
