At a Windsor retreat for senior HSBC employees in early December, chief executive Noel Quinn made it clear he had no intention to leave the bank, three people who attended told the Financial Times.
Yet during the Christmas break just weeks later, Quinn had made a decision to retire after five years in the role.
The unexpected announcement on Tuesday that the 62-year-old was stepping down has not only kick-started a search for a new leader of Europe’s largest bank but also set off speculation about his decision to give up the top job.
Quinn blamed the intensity of a position that has seen him criss-cross between London, Hong Kong, mainland China, New York and the Middle East over the past five years. But people inside the bank have had a difficult time squaring statements from Quinn that he would stay for a few more years with the abrupt announcement he is leaving.
“Everyone is still in a state of shock,” said one HSBC banker. Another said employees were “blindsided” by the decision.
HSBC declined to comment further on Quinn’s departure.
Inside HSBC headquarters, the narrative is that it was impossible for both Quinn and group chair Mark Tucker to continue in their roles.
Quinn’s departure has been framed as a timing issue, with both the chief executive and chair coming up against a three-year deadline: Quinn’s likely retirement at about age 65 and Tucker’s nine-year recommended term limit for non-executive directors.
This could have put HSBC in the untenable position of having its two most important roles vacant at the same time, the people said — with Tucker wanting to oversee the transition to a new CEO.
One person who has worked closely with both men said Quinn’s decision to quit “is hallmark Tucker”, adding that if there had to be a choice over who would stay, it was always going to be Tucker.
Sam Johar, chair of board advisory group Buchanan Harvey, said: “Mark Tucker can’t stay beyond 2026, so the board had to work out who was going first: Tucker or Quinn. This way, Mark has time to oversee Quinn’s successor settling into the job.”
Tucker is now on the hunt for his fourth chief executive in less than a decade. As the first outsider to lead HSBC, he has built a reputation as a ruthless and decisive chair.
Before he was installed in 2017, Tucker had already decided who should replace veteran Stuart Gulliver. However, his choice of John Flint, head of the bank’s retail banking and wealth management business, proved a mis-step. Within 18 months, Tucker wielded the axe following frequent clashes between the pair.
Tucker’s decision to promote Quinn on a temporary basis in August 2019 was made permanent seven months later after UniCredit’s then-chief executive Jean Pierre Mustier ruled himself out.
“He’s a very dominant chair,” said a person who knows Tucker well. “He’s not an easy person to work with, but it is better to have a very clever person who is hard to deal with as a chair than a not so clever person who is a pushover.”
Quinn said on Tuesday he was “ready for a change” but would remain chief executive until a successor is found and has agreed to be available through to the end of his 12-month notice period. He said he told Tucker, who is based on the east coast of the US, of his intention to leave earlier this month.
An HSBC lifer, Quinn joined the lender in 1987 via a subsidiary of Midland Bank, which HSBC bought in full five years later. The chartered accountant worked up through the group’s corporate banking division, including a stint in Hong Kong.
With a Birmingham accent and a down-to-earth manner, Quinn is popular among the bank’s rank and file and was often seen walking the floor on Friday afternoon when he ran the commercial bank.
“At its core this [HSBC] is a commercial bank. And he was the quintessential commercial banker,” said an HSBC banker.
At a lunch with HSBC bankers and clients in New York last week, Quinn said that the best job he had in the industry was when he was dealing with clients and lamented the grind of the constant governance and oversight issues that are part of running a global bank.
His tenure as chief executive was marked by two major events: the coronavirus pandemic and a call from HSBC’s largest shareholder, Ping An, to split up the 159-year-old lender and list its Asia business in Hong Kong. He steered the bank through both crises, and on Tuesday shares in the lender closed at their highest level since 2018.
“During [Quinn’s] tenure as CEO he has simplified the business . . . successfully navigated the pandemic and ongoing geopolitical tensions, and managed to achieve record profits, the strongest return in a decade and highest dividend since 2008,” said Citigroup analyst Andrew Coombs.
But the new chief executive will take the top job at a time when geopolitics looms particularly large, with renewed tensions between Beijing and Washington and elections in both the UK and US.
HSBC has a difficult enough task keeping both UK regulators and its Hong Kong shareholder base onside, a tension brought to a head during the pandemic when the Bank of England blocked it from paying dividends.
It also depends heavily on its US dollar clearing licence, without which large parts of the business cannot operate. Quinn was due to attend a HSBC Wealth Management event in New York last week but ended up pulling out due to an undisclosed last-minute urgent matter.
The task is choosing a leader who can maintain good relations with both China and the west, an increasingly difficult endeavour that had started to grate on Quinn, according to two people who worked with him.
“It’s part and parcel of running HSBC,” a top 10 shareholder in the bank said about the task of juggling global tensions. “HSBC is always exposed to geopolitical risk.”
Within the bank, the frontrunner to succeed Quinn is Georges Elhedery, whose promotion to chief financial officer in late 2022 immediately cast him as heir apparent. Elhedery’s ascent to chief executive so soon after his appointment to the C-suite would come as something of a surprise, however, because of the circumstances of his predecessor Ewen Stevenson’s exit.
The New Zealander’s decision to leave the bank after just under four years surprised investors. People with knowledge of his decision said Stevenson had aspirations of taking the chief executive role, but it had been made clear that Quinn would stay in place for several more years.
Elhedery faces stiff competition from other internal contenders, including Greg Guyett, chief executive of global banking and markets, and Nuno Matos, CEO of wealth and personal banking.
As an outsider with a background at Prudential and AIA himself, Tucker could also take the radical step of looking outside the bank’s ranks for Quinn’s replacement. There are former HSBC bankers scattered through the biggest global banks and asset managers: not least Charlie Nunn, Lloyds Banking Group’s chief executive.
“Whomever comes in, it’s not going to result in a massive strategic hiatus,” said the top 10 shareholder.
“When rates are nicely positive like they are now, it’s a huge support to your profitability and returns — the new CEO will have an easier job coming in than Noel did.”
Additional reporting by Harriet Agnew in London