HSBC has named CFO Georges Elhedery as its next CEO, effective Sept. 2, the bank said Wednesday.
The announcement caps what the bank termed a “rigorous selection process” over the nearly three months since outgoing CEO Noel Quinn said he would step down, seeking a better work-life balance and a “portfolio career” — one not defined by a single role. Quinn is a 37-year HSBC veteran.
HSBC said it considered internal and external candidates. However, Elhedery had been seen as an early front-runner for the job.
Born in Lebanon, Elhedery joined the bank in 2005 and climbed the ranks through its Middle East business, leading HSBC’s operations in that region from 2016 to 2019. Elhedery was then named co-head of global banking and markets and, in late 2022 — shortly after a six-month sabbatical during which he reportedly learned Mandarin — was appointed CFO in a move that essentially ousted former finance chief Ewen Stevenson.
When Elhedery returned from his sabbatical, he was placed directly under Quinn’s supervision — another potential hint that HSBC may have been grooming him to eventually succeed the CEO.
HSBC’s wealth management chief, Nuno Matos, and the man who succeeded Elhedery as head of banking and markets, Greg Guyett, were also seen as potential CEO candidates, alongside Barry O’Byrne, the bank’s commercial-banking chief, according to The Wall Street Journal.
HSBC was exploring financial incentives and reallocating key projects to retain the executives who were not chosen for the top job, two people with knowledge of the matter told Reuters.
HSBC has not named Elhedery’s successor as CFO but will do so “in due course,” the bank said.
Quinn, meanwhile, will work closely with Elhedery “to ensure a smooth transition and an orderly handover of responsibilities,” HSBC said, and will remain available to the bank’s board for consultation until April 30, 2025 — one year after he announced his resignation.
As CEO, Elhedery is set to receive a base salary of £1.38 million ($1.8 million), a fixed pay allowance of £1.7 million and a pension allowance of £137,600. He will also be eligible for an annual award valued at up to 215% of his base salary, and a long-term incentive of up to 320% of his base.
Quinn made £10.6 million altogether last year.
Score one for continuity
Elhedery’s appointment can be seen as a move that bolsters continuity — a prospect Matt Britzman, an equity analyst at Hargreaves Lansdown, called “essential,” according to Reuters — considering the balance the bank has struck between its two dominant prongs.
HSBC can lay claim to the title of Europe’s largest bank, but it makes more than half of its revenue in Asia. And its largest shareholder, Chinese insurance giant Ping An, has been vocal in its push for HSBC to spin off its Asian operations.
HSBC has resisted thus far but has also, under Quinn, consolidated some of its international retail operations. The bank last year closed a $10 billion deal to sell its Canadian retail footprint to the Royal Bank of Canada. It also, after several years of trying, let go of its French retail presence and, in 2021, sold 80 of its U.S. branches to Citizens Bank and another 10 to Cathay Bank.
The branch strategy was just part of an initiative Quinn launched in 2020, meant to slash costs by $4.5 billion per year by cutting 35,000 employees and offloading $100 billion in assets.
Tomasz Noetzel, a Bloomberg Intelligence analyst, said, “further cost control looks inevitable.”
Stanley Tsai, founder of Hong Kong-based investment adviser Antler Capital, said Elhedery was not a surprise choice.
"Some investors might've wanted someone with more direct Asia experience, especially with the Greater China portfolio, but it’s always been the non-Asia business that has presented the most overwhelming challenges," Tsai said, according to Reuters.
Navigating China and Mark Tucker
Among the challenges Elhedery stands to face include consistent political tension between China and the West — particularly as it reflects on Hong Kong, a major hub for the bank with strong influences from both sides.
HSBC also faces continued exposure to China's lending crisis, which spurred the bank in February to take a $3 billion impairment charge over its investment in Bank of Communications.
“One question for Elhedery is where he will stand on the question of HSBC’s geographical footprint and on whether divestitures of additional geographies should be actively pursued,” Michael Makdad, a senior equity analyst at Morningstar, said in a note seen by Bloomberg.
Another relationship Elhedery may have to manage is that with the bank’s hands-on chairman, Mark Tucker. Elhedery would be the third CEO Tucker has hired. The first, John Flint, left suddenly in 2019 after about 18 months leading the bank. Quinn was named interim CEO at that point, then given the role fully in 2020.
In a statement Wednesday, Tucker said he was “delighted” to welcome Elhedery as CEO.
“He is an exceptional leader and banker who cares passionately about the Bank, our customers, and our people,” Tucker said. “He has a track record of leading through change, driving growth, delivering simplification, containing costs and brings a strong focus on execution. … Throughout the selection process, he has demonstrated his strategic insight and vision, and deep international perspectives.”
Tucker is set to step down as chair in 2026, when his nine-year term is up. But U.K. corporate governance rules allow for an extension in exceptional circumstances.
Elhedery, for his part, said he is “deeply honoured by the trust placed in me to lead this great institution into the future.”
“Working together with our talented team, I look forward to delivering exceptional value to our clients and investors by driving strong performance on a sustainable growth trajectory,” he said in a statement Wednesday.
