This week I am looking at HSBC, following its recent interim results. The results were better than expected but came with the news that chief executive, John Flint, has left after just 18 months in the position.
Mr Flint indicated that he had come to a mutual agreement with the board that it was time to leave, with the announcement that Noel Quinn, head of its commercial banking unit, would replace Mr Flint until a replacement is found.
The bank also announced that it would be cutting jobs for up to 2 percent of the banks 238,000 employees, with the intention of cutting salary costs by around 4 percent. The focus is likely to be on senior roles within the bank.
Despite the unexpected news of the departure, the interim results were reasonably good, with pre-tax profits rising 15.8 percent to $12.4bn. Much of this came from strong revenue from retail banking and wealth management, plus growth from major products within commercial banking. Revenue in Asia, where HSBC generates about 80 percent of its profits, also increased 7 percent compared to the same period last year.
The company also announced a $1bn share buyback, a move that should help to reassure investors amid the uncertainty. However, the bank has warned of ‘an increasingly complex and challenging global environment’, blaming falling US interest rates and geopolitical issues, including Brexit uncertainties, the global trade war and social unrest in Hong Kong.
Chairman, Mark Tucker, remains reassured that HSBC is in a strong position to deliver on its strategy, and believes that the change in leader will give the bank the opportunity to capture future opportunities.