HSBC’s Next CEO Could Be the First Outsider to Run the Bank

(Bloomberg) -- In its 154-year history, HSBC Holdings Plc has never been run by an outsider. But the stunning ouster of John Flint after just 18 months as chief executive officer suggests that precedent is now vulnerable.

“It is very unlike HSBC to do anything like this. It suggests they clearly will go externally for the next chief exec,” said Richard Buxton, CEO of Merian Global Investors UK Ltd., which holds the bank's shares. “Clearly the board feels it needs a fresh pair of eyes.”

Previous searches for HSBC CEOs have looked outside the bank but have always concluded that an insider is better. However, with Chairman Mark Tucker, the first outsider to hold that post, this time could be different. Tucker had been only recently installed when he picked Flint to succeed Stuart Gulliver, who had favored the appointment of his protege to replace him.

Noel Quinn, head of global commercial banking, will assume the CEO post on an interim basis, HSBC said along with its first-half earnings.

Conversations with current and former HSBC employees, who asked not to be named when discussing a sensitive matter, and analysts yield a range of outside and insider candidates.

INTERNAL CANDIDATES

Quinn: Regional head of commercial banking for Asia Pacific for four years up to 2015, he has also worked at HSBC Insurance Services in North America. “The glowing terms in which the chairman referred to interim CEO Noel Quinn suggest that it is his to lose,” said Edward Firth, an analyst with Keefe, Bruyette & Woods in London.

Ewen Stevenson: The former investment banker and Royal Bank of Scotland Group Plc chief financial officer has been at HSBC since January 2019 but is already seen as a CEO in waiting. Stevenson has instituted a company-wide program to rein in expenses and is known as a straight-talker who has developed a good relationship with Tucker. Asked whether he would like the job this month he swerved the question, but it is unlikely he would be averse to a promotion.

Antonio Simoes: Previously head of U.K. and Europe, the Portuguese has run global private banking since January 2018. He was once seen as a potential internal candidate to replace Stuart Gulliver. He runs the smallest division at the bank but his experience could play in his favor.

Charlie Nunn: Named CEO for retail banking and wealth management in January 2018, succeeding Flint. Nunn, 47, has held a variety of senior roles at HSBC's biggest division by revenue since joining in 2011 from McKinsey & Co., where he was a senior partner. His lack of connection with the Asian market and his proximity to Flint make him a longshot.

OUTSIDERS

Piyush Gupta: CEO of Singapore's DBS Group Holdings Ltd. for almost a decade. A former Citigroup Inc. executive, Gupta has the Asian experience required of any HSBC CEO and has been credited with turning DBS into a technology leader, an area where HSBC is considered something of a laggard. “Piyush is happy at DBS and has no plans to leave,” said Karen Ngui, a spokeswoman for DBS.

Antonio Horta-Osorio: Once seen a potential candidate for HSBC before Flint's appointment, the Portuguese executive has been CEO at Lloyds Banking Group Plc for about eight years.

Horta-Osorio has been cutting expenses, targeting costs of around 40% of its income at the end of 2020. That would make it one of the most efficient European lenders and jibes with Tucker's priorities. A spokesman for Lloyd's declined to comment.

--With assistance from Candice Zachariahs.

To contact the reporters on this story: Harry Wilson in London at hwilson57@bloomberg.net;Stefania Spezzati in London at sspezzati@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, James Hertling, Marion Dakers

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