HSBC on Monday announced the shocking departure of Chief Executive Officer John Flint after just 18 months in the role, saying the bank needed a change at the top to address “a challenging global environment”, even as it posted a 16% rise in half-yearly profit.
The lender also declared a further share buyback of up $1 billion, defying some analysts’ expectations it might pause its strategy of returning extra capital to investors.
A person familiar with the matter said that Flint’s exit was a result of differences over the execution of his strategy and was disclosed early on Monday (Aug 5) along with HSBC’s half-yearly results which had been scheduled for release later in the day.
The departure comes as Europe’s biggest bank is grappling with headwinds including an escalation of a trade war between China and the United States, an easing monetary policy cycle, unrest in the key Hong Kong market and uncertainty about Brexit.
Flint, 51, ran HSBC’s retail and wealth management business before taking over as CEO in February 2018. His appointment was the first major decision taken by the bank’s first externally appointed chairman Mark Tucker, who came on board in late 2017.
Tucker said in a statement, “In the increasingly complex and challenging global environment … the board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us.”
Meanwhile, London-headquartered HSBC said the board would consider internal and external candidates for the new CEO and Noel Quinn, the head of its global commercial banking unit, will hold the role of interim chief executive.
The bank said in a statement, “Although not carrying out his day-to-day duties after today, he (Flint) remains available to assist HSBC with the transition.”
Flint, 51, said, “I have agreed with the board that today’s good interim results indicate that this is the right time for a change, both for me and the bank.”
While the bank did not provide the reason for Flint’s sudden departure, a person familiar with the matter, declining to be named due to the sensitivity of the issue, said it was a result of differences of opinion between Flint and Tucker over the pace and result of the strategy execution.
He further added that the main difference arose from Flint’s softer approach to cutting expenses and setting revenue targets for senior managers to boost profit growth.
