HSBC Holdings says its interim chief executive Noel Quinn will keep the role permanently, effective immediately, the bank said on Tuesday.
“Noel has proven to be the outstanding candidate to take on a role permanently that he has performed impressively on an interim basis since August 2019,” Mark Tucker, chairman of HSBC, said in a statement.
Quinn, 58, was appointed acting chief executive and replaced John Flint in August after Tucker said a “different approach” was needed by HSBC in a more challenging environment. Flint was in the job just 18 months.
Quinn takes the top job at HSBC at a challenging time. Global economic is set to slow because of the coronavirus outbreak that has infected over 180,000 people worldwide. The bank, Europe's largest banks by assets, and other lenders are also struggling to navigate historically low-interest rates worldwide.
The US Federal Reserve cut interest rates by one percentage point to zero on Sunday, which was immediately followed by Hong Kong Monetary Authority cutting its base rate by 64 basis points to 0.86 per cent. Hong Kong, where the bank has a large presence, fell into recession in the third quarter.
Tucker believes Quinn to be the right man to navigate these problems.
“He is a strong and proven leader with extensive global banking expertise, deep client relationships and the energy and skill to drive the business forward at pace,” Tucker said. “In the last few months, Noel has worked closely with the board to agree on the key actions required to build and enhance performance on a sustainable basis. He has shown a great understanding of HSBC, the challenges we face and the significant opportunities for growth that lie ahead.”
After the appointment, Quinn said in a statement that he would work with Tucker and the over 230,000 staff of HSBC worldwide “to reposition the bank for success in the future.”
“HSBC is an outstanding global company with talented and dedicated people. There is much that remains to be done and I am confident that we will rise to the challenge and deliver for our shareholders, customers, employees and society at large,” Quinn said.
His pay package includes a base salary of £1.27 million (US$1.53 million) and a fixed pay allowance of £1.7 million per year and a pension equal to 10 per cent of his base salary. He may get a bonus of up to 215 per cent of his salary, according to the bank's filing in London.
This is similar to that of his predecessor John Flint who had a base salary £1.2 million a year, a fixed pay allowance of £1.7 million and a pension allowance of £360,000.
The bank is listed in both London and Hong Kong. The bank’s shares in London rose 6.5 per cent on Tuesday to close at 494.65 pence.
Quinn has a BA (Honours) in Accountancy from Birmingham Polytechnic. In 1987, he joined Forward Trust Group, a subsidiary of Midland Bank which in the early 1990s were taken over by HSBC. He was based in Hong Kong from 2011 to 2015 when he was the regional head of commercial banking for Asia-Pacific. He was appointed chief executive of global commercial banking in December 2015, and became group managing director in September 2016, according to the website of the bank.
Since taking over as interim chief executive, Quinn has restructured the bank's European management, reshuffled its investment bank and named a new executive to oversee strategic execution in its US business.
In February, Quinn said HSBC would cut as many as 35,000 jobs and reduce annual costs by a further US$4.5 billion in the bank's third major reshaping in a decade.
As part of the revamped strategy, HSBC is making a bigger bet on rising income in mainland China and Asia, particularly in the Greater Bay Area as China's financial services industry further opens up. Quinn has said the bank would shift capital from underperforming businesses in Europe and the US to growth markets, including China and Hong Kong.
HSBC has been shrinking its investment bank in Europe and the US and cut its American retail branch network by 30 per cent.
Moody's and other major credit rating agencies downgraded their outlooks for HSBC to negative in November and in December after the bank warned it would not reach its 11 per cent return on tangible equity (ROTE) target in 2020. The bank's ROTE was 8.4 per cent in 2019.
The question isn’t who is going to let me; it’s who is going to stop me.