HSBC shares jump after bank names AIA's Mark Tucker as chairman

[LONDON] HSBC Holdings Plc named insurance executive Mark Tucker to succeed Douglas Flint as chairman, enlisting an outsider to oversee Europe's biggest bank as it overhauls management. Its shares climbed the most in three months.

Mr Tucker, 59, chief executive officer of AIA Group Ltd and former head of Prudential Plc, will take the post Oct 1, the bank said in a statement Monday.

AIA regional CEO Ng Keng Hooi will immediately become CEO-designee and formally succeed Mr Tucker on Sept 1.

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

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.

In Mr Tucker, HSBC will add an executive with more than two decades of Asia experience to help the lender in its so-called pivot toward the region. Mr Tucker was CEO of Prudential Corporation Asia from 1994 to 2003 and took over AIA in 2010 prior to its listing in October that year, according to a biography from the Hong Kong-based insurer.

AIA has quadrupled its value of new business, which measures the future profitability of new policies, with Mr Tucker at its helm, exchange filings show.

"He's clearly done a good job at AIA," said Hugh Young, Asia managing director at Aberdeen Asset Management Plc, which holds HSBC and AIA shares.

"Let's see how it pans out but I think it could be an inspired appointment."

HSBC shares rose 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.

Mr 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 Plc, as well as his leadership jobs at Prudential and AIA.

Mr Tucker is also on the board of New York-based Goldman Sachs Group Inc. 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 SA CEO Henri de Castries and former leader of Diageo Plc 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.

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.

Job Cuts

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 pair endured a difficult period in early 2015, when UK lawmakers criticised 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.

BLOOMBERG