HSBC cutting 4,000 jobs as CEO makes shock exit

Global headcount to go down by 2%; bank says it remains committed to Singapore ops

Mr John Flint, who started at HSBC as a trainee, leaves the bank after just 18 months as chief executive officer.
Mr John Flint, who started at HSBC as a trainee, leaves the bank after just 18 months as chief executive officer.

HSBC remains committed to its Singapore operations and will size headcount accordingly even as it cuts about 2 per cent of its workforce globally this year, group chief financial officer Ewen Stevenson said yesterday.

Mr Stevenson, when asked if the cuts would affect Singapore, noted: "It's one of the predominant financial centres in the region that's very important to us and we are very committed to continuing to grow there in certain parts of our business, for example, private banking."

Singapore is one of eight strategic countries the bank is investing in, said group chairman Mark Tucker.

HSBC Holdings announced earlier yesterday the shock departure of chief executive officer John Flint after just 18 months in the role.

The disclosure came as the London-headquartered bank released its half-year results.

It forecast a gloomier outlook for its business, with an escalation of the trade war between China and the United States, an easing monetary policy cycle, unrest in its key Hong Kong market, and Brexit, Reuters reported.

Global commercial banking unit head Noel Quinn will be interim CEO.

Mr Flint, 51, who started at HSBC as a trainee, clashed with Mr Tucker over style. Mr Flint focused on cultural issues at the firm while Mr Tucker took a more data-driven approach, Bloomberg reported, citing people familiar with the matter.

It also reported that Mr Tucker had grown impatient with the execution of strategic priorities, such as Mr Flint's slow progress with boosting the US business.

Mr Tucker said in a conference call from London that the move was not related to personality clashes or disagreements over strategy.

"John's done a good job in taking the organisation forward, but there's a belief that the environment we are going into needs a different person to be able to take that forward," he said.

"We think Noel... brings pace, he brings decisiveness, he brings ambition, all of these things are important in the next stage and we feel he's the right man at this time."

Mr Tucker, who became HSBC's first externally appointed chairman when he joined the board in late 2017, said the search for a new CEO, which will include both internal and external candidates, could take up to a year.

Mr Stevenson said the bank will be working to constrain the rate of cost growth in line with the slower revenue growth expected, as part of the restructuring programme that includes job cuts.

The job cuts will affect fewer than 2 per cent of the bank's more than 230,000 employees this year - implying around 4,000 positions will go - but will cut about 4 per cent of the wage bill, as they target more senior employees, he said.

Most of those affected have been told, he added.

Various parts of Asia are showing good growth and good returns, and headcount is still being added in those places, Mr Stevenson said.

"Where we see slower growth, we will try to more actively manage that headcount reduction through natural attrition," he said, adding that the bank sees a natural attrition rate of 5 to 10 per cent in most areas.

The bank reported pre-tax profit of US$12.4 billion (S$17 billion) for the first half of this year, up 15.8 per cent from the same period last year.

Reported revenue rose 7.6 per cent, while adjusted revenue was up 8 per cent, due to strong performances in the retail banking and wealth management sector, as well as the commercial banking sector.

Meanwhile, the global banking and markets sector suffered from reduced activity due to ongoing economic uncertainty and spread compression, said the bank.

Reported operating expenses fell 2.3 per cent. Adjusted operating expenses were up 3.5 per cent.

Earnings per share were 42 US cents.

The bank said it intends to initiate a share buyback of up to US$1 billion, which it expects to commence shortly.

A version of this article appeared in the print edition of The Straits Times on August 06, 2019, with the headline 'HSBC cutting 4,000 jobs as CEO makes shock exit'. Subscribe