Bank departure

Quinn leaving HSBC as Asia challenges mount

Noel Quinn
Noel Quinn: looking for balance (pic: HSBC)

Noel Quinn surprised the markets today by announcing he will step down as chief executive of HSBC to take on a “portfolio career”.

Mr Quinn, 62, who will stay in the role until a successor is named, has worked at HSBC for 37 years. He was first appointed to the role on an interim basis in 2019, after his predecessor John Flint was ousted.

“After an intense five years, it is now the right time for me to get a better balance between my personal and business life,” Mr Quinn said.

His departure was announced along with first quarter figures showing a 1.8% year-on-year drop in profits that was better than expectations.

However, analysts said Mr Quinn appeared to be getting out as the bank’s core Asia market continues to be confronted with underlying weaknesses.

“Noel Quinn can argue the announcement of his plan to retire coincides with some good news,” says AJ Bell investment director Russ Mould. “However, HSBC is no longer the most-highly valued of the FTSE 100’s megabanks.

“Exposure to China and Asian emerging markets offered by both HSBC and Standard Chartered is no longer seen by investors as an asset but a potential challenge, at least in the near term.”

Since Mr Quinn took the helm in August 2019, HSBC has had to navigate Covid-19, the very long lockdown in China and its sluggish post-pandemic economic recovery, which has been held back by the failing real estate sector.

“All of these factors have weighed upon the bank’s share price performance, even if analysts’ believe that HSBC will set new all-time highs for both annual profit and dividend payments in 2024,” says Mr Mould.

“Even then, analysts seem to suspect that this may be as good as it gets for HSBC, as profits are not expected to progress in the next two years.

“The economic trajectory of China and Hong Kong is a key concern, especially as the Asian operations generated $5.5 billion of the $12.7 billion reported pre-tax profit for the first quarter of 2024.”

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