HSBC named Georges Elhedery as its new chief financial officer on Tuesday (Oct 25) in a surprise shift that puts the former head of its investment bank in pole position to eventually succeed Noel Quinn as chief executive.
The change came as HSBC reported a 42 per cent slide in third quarter profit, hit by loan losses and charges from the sale of its French business as it seeks to placate investors including its largest, China's Ping An Insurance Group.
HSBC's shares fell 5 per cent in London, after a 2.5 per cent drop in its Hong Kong stock despite a firm broader market, as investors digested the sudden management change and rising bad loan charges.
Elhedery's sudden elevation comes after the 48-year-old took a six-month sabbatical from HSBC in January, citing a desire to travel with his family and explore personal interests.
Quinn told Reuters that while departing CFO Ewen Stevenson had done a good restructuring job over the last three years, the London-headquartered bank's move was done with succession in mind, effectively putting Elhedery at the front of the queue.
"There is no change in strategy as a consequence of these leadership changes," said Quinn, 60. "This is about how the group executive committee is positioned with potential succession options for the future," he told Reuters.
Since his return to Europe's biggest bank in September, Elhedery has been working on projects for Quinn. He is one of several Lebanese bankers to rise to the top ranks at HSBC, including his predecessor at the investment bank, Samir Assaf.
Former investment banker Stevenson, 56, who will leave HSBC next year, told Reuters he was "looking forward to some time off and thinking about future options".
"Stevenson was undoubtedly seen as doing a great job amongst the investor community," said John Cronin, analyst at Goodbody.
"His exit is most certainly a surprise and it smells of a fallout at the top management level in terms of direction of travel for HSBC - which will raise many questions," he said. REUTERS