John Flint’s tenure running HSBC Holdings PLC has come to an abrupt end, with the bank announcing early yesterday in Asia that the chief executive officer was stepping down.
The board believed a change was needed to help the bank, which has seen its Hong Kong-listed shares fall about 15 percent in the past year, meet the challenges it faces in an increasingly complex environment, chairman Mark Tucker said in a statement.
Some HSBC executives in Asia expressed surprise at the move, saying there had been no indication that a change was afoot.
Photo: Reuters
Global banks are struggling with low to negative rates, trade tensions slowing growth and disruptions from automation.
European firms in particular have found it hard to cope: Deutsche Bank AG is restructuring its operations and cutting 18,000 jobs, while Societe Generale SA plans to cut about 1,600 positions.
HSBC, which makes most of its money oiling the wheels of trade between East and West, has faced repeated questions about why a business heavily skewed toward some of the world’s fastest-growing economies cannot make better returns.
Flint’s exit signals the board’s desire to accelerate change alongside a “potentially rapid deterioration” in outlook, JPMorgan Chase & Co analysts wrote in a report.
He is being replaced on an interim basis by Noel Quinn, head of global commercial banking.
The lender, which also released its latest quarterly results several hours earlier than scheduled, did not give a reason for the decision.
Flint, 51, joined HSBC in 1989 and took over as chief executive in February last year.
The bank said second-quarter adjusted pretax profit was US$6.2 billion, higher than the US$5.7 billion analyst estimate compiled by HSBC.
HSBC has struggled to win over investors. One of Flint’s key promises was that revenue gains would outpace cost increases, a trend the bank refers to as positive jaws.
He failed to achieve that in his first year at the helm, though the bank said yesterday that first-half adjusted jaws was a positive 4.5 percent.
At least 500 jobs were set to be culled within global banking and markets, people familiar with the matter said in May, with London likely to be in the front line.
Flint’s departure follows exits last month of US head Patrick Burke and Greg Pierce, who ran the US markets business.
HSBC expects severance costs to range from US$650 million to US$700 million this year, with annualized savings of a similar amount, according to an investor presentation.
The lender also said it would shortly begin a buyback of up to US$1 billion.
The bank said that it did not expect to achieve its targeted 6 percent return on tangible equity (RoTE) in the US by next year.
While HSBC would continue to target overall RoTE of more than 11 percent next year, “we will not take short-term decisions that could jeopardize the long-term health of the business,” it said.
First-half adjusted pretax profit rose 6.8 percent from a year earlier to US$12.5 billion. In the second quarter, adjusted operating expenses rose to US$8.1 billion from US$7.8 billion.
“Our sense is the climate is getting increasingly complex, increasingly challenging, and that we both agree a change is needed to really make the most of the opportunities ahead of us,” Tucker said in an interview yesterday.
The CEO hiring process would take six-to-12 months, and consider both internal and external candidates, he said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six