The chief executive of HSBC has stepped down after less than two years in the job, as the banking giant revealed solid first half profits but warned it faced “challenging” geopolitics.
The bank has also said it could cut nearly 5,000 jobs due to a weaker outlook, and the departure of John Flint comes as trade-war tensions flare between the United States and China.
Under Flint’s leadership, the bank has pivoted to Asia, which accounted for more than half of its operating income in the second quarter.
HSBC Chairman Mark Tucker said talks over Flint’s future had been “going on for a while” and the decision was not taken lightly.
“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,” Tucker said. “This is a decision about the future.”
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.
The 51-year-old Flint ran the bank’s retail and wealth management business before taking over as chief executive last year. At that time, he was seen as a safe choice for the top job and was known to be the favored selection of his predecessor, Stuart Gulliver.
In an interview with the Financial Times on Monday, Tucker said: “This had nothing to do with personalities; this was a unanimous decision of the non-executive directors.”
Tucker denied that Flint was opposed to new cost cutting plans, which HSBC revealed on Monday would result in up to 4,700 job cuts, or 2 percent of its 237,685-strong global workforce. The move is expected to hit senior staff the hardest, helping reduce salary costs by as much as 4 percent.
HSBC made the surprise announcement as it reported a 15.8 percent rise in pretax profit to $12.4 billion for the six months to June 30.
Ronit Ghose, bank analyst at Citi, told the FT that Tucker and HSBC’s directors had “clearly lost confidence in (Flint’s) ability to navigate the tougher outlook faced by HSBC given the geopolitical and macro uncertainties, structural headwinds for global banks, and digital disruption challenges”.
“In addition, we believe there were likely differences in style between the outgoing CEO and the chairman,” Ghose added.
Reports earlier this year noted that an HSBC investigation led to charges against Chinese company Huawei Technologies’ Chief Financial Officer Meng Wanzhou, after the US demanded the bank’s help. HSBC provided the information that allowed the US to apply for the extradition of Meng.
The request for information came while HSBC was being monitored by US authorities over sanctions-busting and failing to prevent money laundering in Mexico.