HSBC chief executive John Flint ousted after less than 18 months

HSBC chief executive John Flint has been ousted after less than 18 months in the job having lost the confidence of the bank’s board of directors in an abrupt move for a company famed for its conservatism.

The bank said Mr Flint had resigned “by mutual agreement with the board” and that it had appointed Noel Quinn, head of its commercial banking unit, as interim chief executive while it searches for a replacement.

The bank’s board of directors had become increasingly frustrated at the slow pace of change at HSBC since Mr Flint took the top job in February 2018, according to two people briefed on the circumstances surrounding his departure.

The board decided that Mr Flint had to be replaced some time ago but wanted to wait for an opportune moment, before deciding to make the announcement alongside HSBC’s relatively strong first-half results on Monday, the people added.

Rumours that Mr Flint was unhappy in the job had swirled for months, with some senior HSBC executives recounting clashes with Mark Tucker, the bank’s chairman. “They are both incredibly stubborn,” one executive told the Financial Times last month.

The departure of Mr Flint throws open one of the biggest jobs in global banking at a time when HSBC — which generates 80 per cent of its profits in Asia — must navigate escalating tensions between the US and China as well as protests in Hong Kong, its largest market. The bank also announced that it would be cutting thousands of jobs alongside the departure of its chief executive.

In an interview with the FT on Monday, Mr Tucker said: “This had nothing to do with personalities; this was a unanimous decision of the non-executive directors.”

Mr Tucker said the board would do a “proper search, internally and externally” to find a replacement for Mr Flint, but said that Mr Quinn had a “wonderful opportunity to show what he can do”.

He added: “Noel will be able to bring his experience and his perspective to think about growth, to move back again to the growth agenda.”

Ronit Ghose, bank analyst at Citigroup, said Mr Tucker and HSBC’s directors had “clearly lost confidence in [Mr Flint’s] ability to navigate the tougher outlook faced by HSBC given the geopolitical and macro uncertainties, structural headwinds for global banks, and digital disruption challenges”.

“In addition, we believe there were likely differences in style between the outgoing CEO and the chairman,” Mr Ghose added.

In a statement Mr Flint said: “I have agreed with the board that today’s good interim results indicate that this is the right time for change, both for me and the bank.”

Mr Tucker, who spent decades as an insurance chief executive at Prudential and AIA, ruled himself out of the running for the top job at HSBC. Asked whether he would consider taking on the role, he replied: “Under no circumstances . . . I want to leave the executive role to those with significantly greater ability and youth on their side.”

Ewen Stevenson, chief financial officer, said that up to 2 per cent of the bank’s roughly 238,000 employees would lose their jobs this year. The cuts will be targeted predominantly on highly paid, senior staff, meaning that the reductions will result in a 4 per cent decline in the bank’s wage bill, Mr Stevenson said, and would be achieved through a mixture of redundancies and natural attrition.

The redundancies will cost HSBC between $650m and $700m this year and should save the bank roughly the same amount annually, Mr Stevenson added.

News of Mr Flint’s departure came as HSBC announced a share buyback of $1bn and second-quarter results that were ahead of analyst expectations. However, the bank warned of “an increasingly complex and challenging global environment” linked to falling US interest rates, the global trade war, the prospects of a “no-deal” Brexit in the UK and social unrest in Hong Kong.

HSBC’s London-listed shares were down 1.86 per cent by UK midday at 634.2p.

Mr Flint — who has spent his entire three-decade career with the London-headquartered lender — was appointed chief executive in late February last year, replacing Stuart Gulliver. Mr Gulliver had groomed Mr Flint as his successor for years, prompting potential rivals for the top job, such as Simon Cooper, now at Standard Chartered, to quit the bank.

But the board always harboured doubts about Mr Flint, in part because he had been in Mr Gulliver’s shadow, according to directors that were at the bank when he was selected for the role. Mr Flint found the selection process humiliating, he told associates.

At the time, the board was under pressure to seek an outside candidate for chief, following a series of scandals and HSBC’s deferred prosecution agreement with the US Department of Justice.

HSBC reported second-quarter net profits of $4.4bn, up 7 per cent compared with the same period last year, on revenues that were 10 per cent higher at $14.9bn. Analysts had expected profits of $3.8bn and revenues of $14bn.