HSBC to cut thousands of jobs to control costs after Flint's exit

Andrew Cummings
August 7, 2019

Flint was himself the epitome of diplomacy in his statement: "It has been a privilege to spend my entire career with HSBC, rising from International Officer Trainee to serve as Group Chief Executive".

"The bank, which made nearly 90% of its profits in Asia a year ago, also sits in the middle of the escalating trade war between the United States and China".

CNN noted that while HSBC saw higher profits in the second quarter of this year under Flint's command, the bank admitted that there are challenges along the way.

Addressing rumors that Flint had been pushed out after a management row, Mark Tucker, the bank's chairman, told reporters there had been "no personal clash" and "no disagreement over strategy". Tucker insists that the hunt for the next CEO is on and both internal and external candidates are being considered.

Shares in HSBC, which fell almost 14% during Flint's tenure, were down 1.7% in London at 1111 GMT, even though it reported a 16% rise in profit and a revealed a share buyback of up to $1 billion.

The differences arose from Flint's softer approach to cutting expenses and setting revenue targets for senior managers to boost profit growth, said the person, declining to be named due to the sensitivity of the issue.

HSBC has also granted Mr Flint "good leaver" status which means he will be entitled to any stock options that vest after he exits the bank provided he does not work at a competitor for two years.

Noel Quinn, HSBC's head of global commercial banking, assumes the role of interim CEO until a successor is appointed. "The current returns on the USA business is not acceptable, '" Hardy reports.

"In the increasingly complex and challenging global environment in which the bank operates, the board agrees that a change is needed - and John [Flint] agrees - to make the most of the significant opportunities ahead of us", Tucker said on a conference call, they report.

The change bears the imprint of the decisive, hard-charging Tucker and the next question for investors is whether he abandons tradition at HSBC, which has long relied on carefully-managed succession plans, and picks an outsider as CEO.

"Although not carrying out his day-to-day duties after today, he (Flint) remains available to assist HSBC with the transition", the bank said in a statement.

As for Flint, he said he was "proud" of what he, along with HSBC, achieved over the past years.

"Trade tensions between the U.S. and China are progressively affecting the growth output in both markets".

First-half adjusted pretax profit rose 6.8 percent from a year earlier to US$12.5 billion.

In the statement the bank said there was "an increasingly complex and challenging global environment linked to lower U.S. interest rates, global trade war, prospects of a no-deal Brexit in the United Kingdom and unrest in Hong Kong".

The lender added that it planned a buyback of HSBC shares worth up to $1 billion.

Chairman Tucker played down the impact of that on the bank's business and said the bank remained confident about the future of the Asian financial center.

Other reports by iNewsToday