NOEL Quinn signed off his final quarter as boss of HSBC Holdings by announcing to return a further US$3 billion to shareholders as the lender reported earnings that beat expectations driven by rising income from global banking and markets.
HSBC’s pretax profit for the three months to June rose to US$8.9 billion, according to the statement, compared with the company-compiled estimate of US$7.8 billion.
“After delivering record profits in 2023, we had another strong profit performance in the first half of 2024, which is further evidence that our strategy is working,” said Quinn, who will hand over the reins to the current chief financial officer Georges Elhedery on Sep 2.
The London-based lending giant is preparing for the leadership transition at a critical time, which Quinn has described as an “inflection point”, as it strengthens its Asian roots in a strategic pivot that’s deepened over the past few years. It has disposed of major businesses in the West, including its French and Canadian operations, and has redeployed capital to particularly South-east Asia and China.
HSBC named Jonathan Bingham as interim group chief financial officer with effect from Sep 2, according to a separate filing.
Most recently, HSBC announced a revamp that would simplify its global banking business to make it look more like its bigger rivals such as Citigroup. The consolidation of several of its industry coverage units into five larger groups has been seen as the latest sign that the lender is preparing for a world readying for interest rate cuts.
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HSBC reported a record profit last year, driven by surging interest rates as monetary authorities around the globe resorted to one of the most aggressive tightening cycles to tame inflation. However, expectations are that this boost will begin to unwind soon.
Efforts are also underway to cut the bank’s expense bill, with moves to slow hiring and rein in travel and entertainment costs, Bloomberg News reported earlier this month.
Elhedery’s task in his new role as CEO would be to consolidate those changes and set the bank on a path to further growth while navigating tensions between the US and China, as well as a fragile political and economic environment in Hong Kong, the bank’s single biggest market.
On his appointment earlier this month, Elhedery pledged to deliver “exceptional value” to clients and investors and a “sustainable growth trajectory”. BLOOMBERG
