Date
23 October 2019
John Flint said "the good interim results indicate that this is the right time for change, both for me and the bank". Photo: AFP/Bloomberg
John Flint said "the good interim results indicate that this is the right time for change, both for me and the bank". Photo: AFP/Bloomberg

One strike and you’re out

On the day a historic general strike is happening in Hong Kong, HSBC (00005.HK), one of the city’s leading banks, announced the resignation of its chief executive, John Flint, only 18 months after he took up the job.

The 51-year-old Flint, who was named CEO in February last year, stepped down on Monday “by mutual agreement with the board”, according to the HSBC announcement.

The news caught the market by surprise as it came along with the happy news that the London-based bank, which considers Hong Kong and mainland China as the top income contributors, saw a 16 percent increase in its interim profit.

As to be expected, Flint’s sudden departure set tongues in financial circles wagging as to why he would quit his job despite the bank’s glowing report card.

Quite possibly it has something to do with his relationship with chairman Mark Tucker, HSBC’s first top executive who did not come from the bank’s farm system.

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. I am grateful to my wonderful colleagues at the Bank for their support during my career, and I am proud of what we achieved together.

“I have agreed with the Board that today’s good interim results indicate that this is the right time for change, both for me and the Bank. After almost 30 years with HSBC, I will be sad to leave but I do so looking forward to a new personal challenge, and confident that our people will continue to serve the Bank’s stakeholders in the best possible way.”

The bank, meanwhile, lowered its financial outlook for next year.

“Interest rates in the US dollar bloc are now expected to fall rather than rise, and geopolitical issues could impact a significant number of our major markets,” it said.

“In the near term, the nature and impact of the UK’s departure from the European Union remain highly uncertain. Given the prevailing outlook for interest rates and revenue headwinds in [Global Banking and Markets] and [Retail Banking and Wealth Management], we do not expect to achieve our 6 percent return on total equity target in the [United States] by 2020.”

HSBC is triple-listed in Hong Kong, New York and London. The current trade war between the US and China, along with the worries over Brexit and the political uncertainty in Hong Kong in the last two months, all put pressure on the mighty bank to maintain its profitability on track.

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CG

EJ Insight writer