HSBC shocks market as boss Noel Quinn steps down after five ‘intense’ years

HSBC has launched the search for a new chief executive after Noel Quinn shocked markets by revealing he was stepping down after five “intense” years.

Europe’s largest bank told investors on Tuesday that Quinn, 62, will remain in the role until a successor is found with a formal process underway.

Quinn oversaw a broad global asset sale during his tenure, ridding the bank or downsizing underperforming businesses, including HSBC’s retail banking businesses in the United States and France, its entire Canadian subsidiary and units in smaller markets such as Argentina.

Quin said on Tuesday: “After five intense years, now is the right time to achieve a better balance between my personal and business life. I intend to pursue a portfolio career in the future.

HSBC shares rose 3.43 per cent to 691 pence in Tuesday morning trading, as the lender cushioned news of Quinn’s surprise exit with strong earnings and a bumper share buyback plan.

The Asia-focused bank reported a pre-tax profit of $12.7bn (around £10.1bn) for the quarter to March, slightly above forecasts but below the £10.3bn posted last year.

Following the completion of a $2 billion buyback, which was announced in February, the group said it plans to launch a new $3 billion buyback after its annual general meeting next month.

The bank said it continued to target a return on average tangible equity in the mid-teens by 2024, with net banking interest income of at least $41bn (around £32.7bn), depending on the trajectory of interest rates worldwide.

Quinn leaves big shoes to fill

Outgoing CEO Quinn leaves behind a legacy of record profits and the strongest returns in more than a decade.

This has been achieved primarily by offloading its loss-making retail banking networks in the United States, France, its entire Canadian subsidiary, and units in smaller markets such as Argentina.

Quinn’s restructuring of the lender saw HSBC cut 35,000 jobs amid a $4.5 billion cost-cutting target.

He also led HSBC’s reorientation toward Asia, but successfully confronted shareholder Ping An’s demands for the bank to expand its Asian business.

Mark Tucker, HSBC group chairman, said Quinn had a “long and distinguished 37-year career at the bank and we are very grateful for his significant contribution to the group over many years.”

He added: “He has driven our transformation strategy and created a simpler, more focused business that delivers higher returns.”

Tucker said the bank aimed to complete Quinn’s succession process by the second half of this year.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Changes at the top usually cause a wobble, even more so when they are unexpected, and this raises some questions about how the strategy will evolve from here.”

‘HSBC’s portfolio is undergoing a reorganization and Quin is far from completing its mission to control costs.

“He may be difficult to follow, but the market reaction suggests that the strong position he leaves behind is enough to calm any uncertainty about who will lead the business from now on.”