HSBC's CEO is stepping down. Who's in the running to replace him?

Lam Yik/Bloomberg

(Bloomberg) – HSBC Holdings Plc's Chief Executive Officer Noel Quinn is stepping down, an unexpected move that comes as Europe's largest lender tries to navigate the deterioration of ties between China and the U.S.

The board has begun a formal process to find a successor, and will consider both internal and external candidates, according to a statement Tuesday. Quinn will stay on during this process to ensure a smooth and orderly transition, it said.

During his tenure, Quinn led a series of strategic reviews that culminated in a plan to boost the bank's investment in its Asian business, while cutting back in developed Western markets such as the U.S. and France. The company is committed to that strategy going forward, even as tensions continue to flare between Beijing and other developed markets around the world.

"This comes as a surprise, especially given Quinn's relatively short tenure during which he has led the bank through significant changes," said Will Howlett, a financial analyst at Quilter Cheviot. "The departure of Quinn introduces an element of uncertainty about the bank's future leadership at a time when HSBC is navigating a complex global financial landscape."

Quinn said he began thinking more seriously about departing the bank over the Christmas holiday in December and he ultimately informed HSBC's Chairman Mark Tucker about his intention to retire in recent weeks. Tucker is aiming to wrap up the CEO search by the second half of the year.

"Doing this job, you have to give 100% — if not 120% — of your energy, your mindset, your time to the role," Quinn said on the conference call with journalists. "You can keep doing that, but that doesn't necessarily achieve the balance in life that I wanted."

Under Quinn's leadership, HSBC's returns have soared and profits touched a record last year. The company's stock has risen 35% since he took over at the height of the coronavirus pandemic in March 2020, compared with the 53% advance of the FTSE All-Share Index.

The bank on Tuesday reported first-quarter pretax profits of $12.65 billion. While that was a small dip from a year earlier, it topped the $12.6 billion average consensus estimate compiled by the company. The lender also announced it's planning to buy back $3 billion worth of shares in the coming months, which was 50% more than what some analysts were expecting.

HSBC shares climbed 3.4% at 9:27 a.m. in London.

Quinn's unexpected exit "will pave the way for HSBC's next stage, to capture Asia growth, after the bank streamlined operations by restructuring and sold some businesses" under his watch, Bloomberg Intelligence analyst Tomasz Noetzel said in a note. "The new CEO will most likely need to demonstrate HSBC's ability to expand non-interest income that was 4% below expectations" in the first quarter.

Quinn's Tenure

This will be the third CEO search under Tucker, who took over as chairman at HSBC in October 2017.

The first came when Tucker appointed Quinn's predecessor John Flint as CEO in 2018. He later handed Quinn the reins after he ousted Flint only 18 months after appointing the HSBC veteran to lead the bank amid disagreements over strategy.

In 2022, Quinn said the promotion of former markets boss Georges Elhedery to chief financial officer was part of the bank's long-term succession planning. At the time, he said his "ambition is to make sure there are no less than three and ideally four to five potential succession options that the board could consider within HSBC."

Quinn began his banking career at British lender Midland Bank in 1987, which HSBC bought in 1992. He spent the majority of his career at HSBC working for the commercial banking unit.

Quinn was granted "good leaver" status, meaning he's still entitled to his deferred awards, and they will continue to vest. That status is conditional on him not taking up a role with a defined list of competitors following his retirement, HSBC said in the statement.

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Quinn said he's planning to pursue a so-called portfolio career, meaning he'll seek multiple roles at different companies, after a period of "rest and relaxation."

"We never felt he looked completely comfortable in the role and suspect that Covid was a particularly brutal period running an international business like HSBC," Perlie Mong, an analyst at Keefe, Bruyette & Woods, said in a note to clients. Still, she said, his departure is "surprising after only four years in the role, particularly as it took 7 months as 'interim' to actually get the job."

Potential candidates

The task of replacing the chief executive officer falls — again — to Tucker.

HSBC is in no rush, since Quinn has agreed to stay while a successor is found. The bank may need that time to find the rare external candidates with enough experience across the Asian and European markets where it operates.

HSBC has a tradition of appointing CEOs from within its ranks. Analysts at Citigroup Inc. highlighted executives including UK head Ian Stuart and Asia-Pacific co-heads Surendra Rosha and David Liao, alongside external candidates with prior experience at HSBC such as Helen Wong, who is now head of Oversea-Chinese Banking Corp., and Simon Cooper, who last month said he was leaving Standard Chartered Plc.

"We would expect any new incoming CEO to adopt a more business as usual approach, focused on organic expansion, following the heavy lifting done during Gulliver and Quinn's tenures," the Citi analysts wrote, referring to former boss Stuart Gulliver.

Here are just some of the potential CEOs-in-waiting.

Georges Elhedery

Elhedery, 50, has been chief financial officer since January 2023, with a tenure of nearly two decades at HSBC making him a prominent internal candidate to take the top job.

The Lebanon-born banker took a six-month sabbatical in 2022, when among other things he learned Mandarin. Upon his return, he switched from being co-head of global banking and markets to the chief financial officer position — a move Quinn said at the time was part of HSBC's long-term succession planning.

Still, serving in the CFO role is no guarantee of winning the succession race, as Elhedery's predecessor Ewen Stevenson learned.

Nuno Matos

Matos, 56, head of wealth and personal banking, joined HSBC in 2015 from Banco Santander SA, and previously worked for the Central Bank of Portugal.

He's been based in Hong Kong for several years and has been touring the wider region, recently visiting the bank's operations in Vietnam and the Philippines alongside Tucker, according to his LinkedIn profile.

Barry O'Byrne

Head of global commercial banking since 2020, O'Byrne also offers plenty of outside experience, having joined the firm in 2017 from GE Capital.

O'Byrne, like Matos, relocated to Hong Kong as part of HSBC's shift toward growing in Asia. The 48-year-old Irishman has held CEO positions in Italy, France and the UK and served on boards in the UK, Switzerland, Germany, Italy and Spain during his career, according to HSBC.

Charlie Nunn

Before he was hired to run Lloyds Banking Group Plc in 2021, Nunn spent nearly a decade at HSBC, including leading wealth and personal banking as well as senior roles in the UK and Hong Kong. Nunn, now 52, worked under Gulliver and later survived the management cull that axed then-CEO John Flint.

Nunn's tenure at HSBC overlapped for several years with Tucker, meaning the British executive will be a known quantity to the chairman.

Amanda Blanc

One of the most senior women in European finance, Blanc is the chief executive officer of insurance group Aviva Plc. She has previously held leadership positions at Zurich Insurance Group AG, AXA SA and the Association of British Insurers. Blanc, 56, also sits on the board of BP Plc.

Jean Pierre Mustier

Mustier's name was in the frame the last time HSBC was recruiting for a CEO, only for the French banker to rule himself out. He ran Italian lender UniCredit SpA between 2016 and 2021. The 63-year-old is currently chairman at troubled French tech company Atos SE and Germany's Aareal Bank AG.