HSBC shares jump after naming AIA CEO Mark Tucker as chairman, Ng Keng Hooi new AIA chief

HSBC named insurance executive Mark Tucker (left) to succeed Douglas Flint as chairman and AIA regional CEO Ng Keng Hooi will immediately become CEO-designee and formally succeed Tucker on Sept 1.
HSBC named insurance executive Mark Tucker (left) to succeed Douglas Flint as chairman and AIA regional CEO Ng Keng Hooi will immediately become CEO-designee and formally succeed Tucker on Sept 1.PHOTOS: REUTERS, AIA

LONDON (BLOOMBERG) - HSBC Holdings named insurance executive Mark Tucker to succeed Douglas Flint as chairman, for the first time enlisting an outsider to oversee Europe's biggest bank as it overhauls management.

Tucker, 59, chief executive officer of AIA Group and former head of fellow insurer Prudential, will take the post on Oct 1, the bank said in a statement on Monday (March 13). AIA Regional CEO Ng Keng Hooi will immediately become CEO-designee and formally succeed Tucker on Sept 1.

Tucker's major task will be to find a successor to HSBC CEO Stuart Gulliver, who has led the bank for more than six years. A replacement is expected to be announced during 2018, in order to meet Gulliver's stated desire to retire in that timeframe, HSBC said in the statement.

HSBC shares jumped 2.3 per cent in Hong Kong as of 1:05pm local time, the biggest intraday gain since Dec 8, extending its advance this year to 3.5 per cent. AIA dropped 2.6 per cent, the most since December.

"He's clearly done a good job at AIA," said Hugh Young, Asia managing director at Aberdeen Asset Management, which holds HSBC and AIA shares. "Let's see how it pans out but I think it could be an inspired appointment."

HSBC, one of the world's largest lenders with about 235,000 employees in about 70 countries, is restructuring to adapt to tougher regulations, a law requiring the separation of its retail operations from the investment bank in the UK and amid a legacy of failed compliance and misconduct. The bank remains under the watch of the US Justice Department after helping South American drug cartels launder money, and faces moderating economic growth in China and the prospect of a post-Brexit slowdown in the UK, its two most important regions.

Tucker played professional soccer in his early life and was on several UK teams including the Wolverhampton Wanderers, Rochdale and Barnet, according to reports from the Daily Telegraph. He switched to finance after attending the University of Leeds. He was finance director at HBOS and held several leadership jobs at Prudential and Hong Kong-based AIA. Tucker is also on the board of US investment banking giant Goldman Sachs. He will step down from Goldman before taking up his role at HSBC.

HSBC has revamped its board after coming under pressure from shareholders unhappy about declining profitability. The bank added Axa CEO Henri de Castries and former leader of Diageo Paul Walsh as independent non-executive directors in November. The board's senior independent director Rachel Lomax ran the search for the new chairman, which the bank has said would be an external hire and take a non-executive role.

Flint and Gulliver's departure from HSBC after six years will end one of the longest-serving management partnerships at a major global bank. The pair slashed over 43,000 jobs and sold assets worldwide as they attempted to shrink the bank back to profitability amid a tougher than expected environment for global banks.

Scotland-born Flint, 61, joined HSBC in 1995, becoming finance director that year before being named executive chairman in 2010. Oxford-educated Gulliver, 57, started at the bank in 1980 and excelled as a trader, rising through the ranks to become CEO in 2011.

Since 2011, the duo has announced more than 87,000 job cuts and exited more than 80 businesses, reducing HSBC's global footprint. Alongside most other European banks, the executives have been struggling to increase profitability faced with record-low interest rates, misconduct fines and rising compliance and regulatory costs. The shares have increased 2.8 per cent so far this year, after a 1.8 per cent gain in 2016 that followed declines of 12 per cent in 2015 and 8 per cent a year earlier.

The pair endured a difficult period in early 2015, when UK lawmakers criticized their leadership after fresh details from files leaked in 2008 showed the bank helped drug cartels and arms dealers launder money and advised customers on how to evade tax.