HSBC Holdings Plc (HSBA.L) has named its Chief Financial Officer, Georges Elhedery, as the next CEO, effective September 2. This decision, announced on Wednesday, underscores the global bank’s preference for internal continuity as it aims to stimulate growth.
Elhedery, 50, will become HSBC’s third chief executive in less than eight years, succeeding Noel Quinn. Despite considering external candidates, HSBC has a tradition of promoting from within. “For most investors, continuity is essential, especially after the battles HSBC’s board has faced to convince shareholders of its strategy,” said Matt Britzman, equity analyst at Hargreaves Lansdown. “This appointment helps alleviate any lingering concerns. However, it will disappoint those hoping for a retreat from HSBC’s non-Asian markets.”
Last year, HSBC overcame a resolution supported by Chinese insurance giant Ping An and other Hong Kong-based shareholders advocating for a spin-off of its profitable Asian business. Ping An, holding an 8.9% stake in HSBC, declined to comment on Elhedery’s appointment.
Lebanon-born Elhedery started his banking career as a rates trader and joined HSBC in 2005. He led HSBC’s Middle Eastern, North Africa, and Turkiye region from July 2016 to February 2019 and later co-headed the Global Banking and Markets division, contributing 24% of the group’s revenues last year. His unexpected appointment as CFO in October 2022, soon after a sabbatical, positioned him for the top role.
“Working together with our talented team, I look forward to delivering exceptional value to our clients and investors by driving strong performance on a sustainable growth trajectory,” Elhedery said in HSBC’s statement.
Noel Quinn, who led HSBC for five years, will remain CEO until Elhedery assumes the role. Quinn’s tenure saw asset sales, navigation through the global pandemic, and efforts to fend off investor pressure to break up the bank, resulting in record profits for the lender.
The appointment comes as HSBC, Europe’s largest lender with $3 trillion in assets, leverages its historic Asian ties for profit growth. Since the 2008 financial crisis, HSBC has reduced its global footprint by about a quarter, focusing on Asia, which generates the majority of its revenues and profits.
Stanley Tsai, founder of Hong Kong-based Antler Capital, noted that while some investors might have preferred a leader with more direct Asia experience, it’s the non-Asia business that has posed significant challenges. Elhedery, who learned Mandarin during his sabbatical, will have to navigate HSBC’s exposure to China’s bad loans crisis and geopolitical tensions.
HSBC will announce Elhedery’s successor as Group CFO in due course. Ahead of the announcement, the bank was exploring financial incentives and reallocating key projects to retain those who missed out on the top job, according to sources.
HSBC’s shares in London and Hong Kong were trading mostly flat after the announcement. The bank’s shares have risen 7% this year, compared to an 18% gain in the STOXX Europe banks index (.SX7P). HSBC will report its interim results on July 31.