Dive Brief:
- HSBC tapped Noel Quinn to take the bank’s top post full-time Tuesday. Quinn had served as the London-based lender’s interim CEO since the surprise August 2019 ouster of former chief John Flint.
- Quinn's appointment can be seen as a measure of continuity for a bank that announced last month it is planning to cut 35,000 jobs and $100 billion in assets over the next three years, to include shrinking its investment bank and overhauling its U.S. and European businesses.
- HSBC is Europe’s largest financial company by market value and the biggest international lender in China. The bank faces challenges in both markets — fallout from Brexit in the U.K. and the effects of coronavirus around the world but especially in China, the outbreak’s initial epicenter.
Dive Insight:
For much of Quinn’s tenure, HSBC Chairman Mark Tucker was thought to have been courting outside candidates, such as former Citigroup bankers James Forese and Stephen Bird and UniCredit’s Jean Pierre Mustier, according to Bloomberg.
Flint’s dismissal came as Tucker grew dissatisfied with the time it was taking HSBC to revive growth in Asia, where the bank, according to Reuters, makes 90% of its profits.
The backdrop of a global pandemic arguably makes Quinn’s task even tougher. HSBC could see $600 million in additional loan losses amid a worst-case scenario in which COVID-19 continues into the second half of this year, the bank said last month. S&P Global estimated that the outbreak will add $100 billion in credit losses to banks in the Asia-Pacific region this year.
Quinn is set to earn a base salary of £1.27 million ($1.5 million), plus £1.8 million in fixed allowances. His bonus has a ceiling of £2.7 million, and he’s eligible for a long-term award of about £4.1 million.
Quinn began his banking career in 1987 at Forward Trust, a unit of Midland Bank, which HSBC acquired in 1992. He spent much of the next two decades in Asia, climbing in HSBC’s commercial banking arm before leading that unit in 2015.
"Noel has proven to be the outstanding candidate to take on a role permanently that he has performed impressively on an interim basis," Tucker said in a statement, according to The Wall Street Journal. "He has shown a great understanding of HSBC, the challenges we face and the significant opportunities for growth that lie ahead."
Analysts marked the announcement with guarded optimism. Ian Gordon, an analyst at Investec, told Reuters that Quinn’s leadership would give the bank "much needed strategic clarity," but added, "I would have welcomed it with greater enthusiasm had it been announced alongside the strategic plan a month ago."
Joseph Dickerson, an analyst at Jefferies, told Bloomberg that Quinn’s appointment "removes an element of uncertainty at a time of crisis that investors will find reassuring."
