HSBC chief out after 18 months on the job

HSBC chief John Flint is stepping down after less than two years on the job.

The bank said in a statement that Flint resigned by mutual agreement with the board, adding that change is needed to meet “the increasingly complex and challenging global environment” HSBC faces.

The London-based bank said it is considering internal and external candidates to replace Flint. In the meantime, Noel Quinn, head of global commercial banking, will act as CEO.

The bank also said it was cutting up to 2% of its global workforce, with a focus on senior employees.

Shares in London fell 3% Monday.

China, Hong Kong, Brexit

HSBC faces a growing list of negative headwinds, including falling interest rates, which crimp lending revenue, and geopolitical uncertainty in top markets. The consequences of Brexit, for example, “remain highly uncertain,” the bank said.

The bank, which made almost 90% of its profits in Asia last year, also sits in the middle of the escalating trade war between the United States and China. Political unrest in Hong Kong poses a risk, too.

HSBC chairman Mark Tucker declined to say whether there’s concern that HSBC could be added to a blacklist of foreign companies China is drawing up, but said they’re “confident” in their China business and “look forward to continuing to support China’s growth and economic prosperity.”

Pressed by analysts to elaborate on the reasons behind the shakeup, Tucker said Flint’s abrupt departure did not signal a shift in strategy.

Instead, it’s about “simplifying and speeding up execution” and getting smarter about how the bank allocates its resources, Tucker said on a call. That’s important “going into an environment which we feel will become increasingly complex and challenging,” he continued.

HSBC also said it’s reducing its headcount by up to 2%, which translates to roughly 4,700 positions. The aim is to reduce wage costs by 4%, which means it will target some higher level employees.

Ewen Stevenson, the chief financial officer, said the reduction would come from a mix of job cuts and attrition. Most of the affected workers have already be notified, he added.

For the quarter, the bank posted a $4.4 billion profit, up from $4.1 billion a year earlier despite weakness in its US business. HSBC also announced plans to buy back $1 billion worth of shares.

Flint joined the bank in 1989 and spent the first 14 years of his career with HSBC in Asia expanding the bank’s global markets business. He moved back to London in 2004 and rose through the ranks, eventually becoming CEO in February 2018.

In a statement, Flint, 51, said the interim results “indicate that this is the right time for change, both for me and the bank.”

HSBC said Flint will stop carrying out his day-to-day duties immediately, but will remain available to assist the bank with the transition.