After flirting with hiring the first outsider to lead the bank in its 155-year history, HSBC has appointed Noel Quinn as its permanent chief executive seven months after he assumed the position on an interim basis.
The appointment of Quinn, who has been with the lender since 1987, removes uncertainty over the bank's leadership as it navigates a global economic downturn sparked by the coronavirus pandemic. Quinn can also push through his plan to transform the UK lender into a leaner, more profitable enterprise — which will involve some 35,000 job losses.
Chairman Mark Tucker said in a statement. "He is a strong and proven leader with extensive global banking expertise, deep client relationships and the energy and skill to drive the business forward at pace." The appointment is effective immediately.
There is much that remains to be done and I am confident that we will rise to the challenge and deliver"
Quinn also wants to cut annual costs by $4.5bn and shed $100bn of assets adjusted for risk by the end of 2022. This is part of a plan to free up capital "trapped" in Europe and the US so it can be deployed in Asia, where the bank generates the vast majority of profits.
HSBC, which calls itself the world's leading trade finance bank, is Europe's largest financial company by market value and the biggest international lender in China.
Tucker defied market expectations that the bank would name Quinn or an outsider to the role when it presented its full year results and new strategy in February, leaving the interim CEO in limbo and in charge of a plan he might not be around to execute.
HSBC's board started looking for a new CEO last fall after ousting former head John Flint and installing Quinn. He was the only internal candidate. Another banker considered for the role included UniCredit boss Jean Pierre Mustier, who withdrew from talks about the position in late February.
Citigroup retail banking boss Stephen Bird, and James Forese, who previously led Citi's investment bank and is now a non-executive director at HSBC, were all linked with the top job.
Quinn said: "I am honoured to be given the opportunity to lead HSBC as group CEO... HSBC is an outstanding global company with talented and dedicated people. There is much that remains to be done and I am confident that we will rise to the challenge and deliver for our shareholders, customers, employees and society at large."
Noel Quinn takes the helm as the London-headquartered bank faces a challenging outlook.
The impact of the coronavirus pandemic is adding to HSBC's longstanding underperformance in the US as well as struggles in investment bank.
The bank makes 90% of its profits in Asia, and the sharp economic downturn in its main markets of Hong Kong and China are also expected to dent its revenues and asset quality in the near to medium term.
Hong Kong, the bank's biggest market, fell into a technical recession in the third quarter after months of anti-government street protests and pressure from an 18-month trade war between the United States and China. The city's economy is expected to contract further this year after the coronavirus has sapped economic activity globally.
In 2019, pre-tax profits at HSBC fell 33% to $13.3bn as the group took a $7.3bn "goodwill impairment" primarily linked to its investment bank. Revenues of $56bn were up 4%.
Quinn will earn a base salary of £1.27m ($1.54m) per annum, a fixed pay allowance of £1,700,000 per year and a pension allowance of £127,100 per year equal to 10% of his base salary. Quinn's service contract also provides for discretionary variable pay that consists of an annual incentive award up to a maximum value of 215% of base salary, and a long-term incentive award up to a maximum of 320% of base salary.