HSBC to replace investment bank head as part of management reshuffle as Noel Quinn moves to ‘remodel’ bank

South China Morning Post 發布於 2019年11月20日16:11 • Chad Bray chadwick.bray@scmp.com
  • Interim CEO Noel Quinn is reshaping the bank as he hopes to take the top job permanently
  • Quinn expects to accelerate cost cuts as part of his efforts to improve profits at the lender
HSBC has increased a provision for expected credit losses by US$400 million to reflect the economic outlook in Hong Kong. Photo: Bloomberg

HSBC plans to shift the long-time head of its investment bank into a new role, as interim chief executive Noel Quinn looks to restructure the business as part of his efforts to "remodel" the bank, according to a person familiar with the discussions.

Samir Assaf, the group managing director for global banking and markets, is be replaced and take a non-executive role in the unit as part of a management reshuffle, according to the person, who was not authorised to publicly discuss the matter. Assaf, who began his career in finance at the French oil and gas company Total, has been with HSBC since the bank acquired Credit Commercial de France in 2000 and has led the investment banking business since 2011.

The management reorganisation is expected to be announced ahead of Quinn revealing his new strategic plan, which is expected before the bank reports its annual results in February.

HSBC declined to comment on Wednesday.

The Financial Times reported the move earlier on Wednesday.

The leadership change comes as Quinn looks to put his stamp on the bank in hopes of keeping the top job permanently after replacing John Flint in August. Flint was ousted after just 18 months in the role, with the bank's chairman Mark Tucker saying at the time a "different approach" was needed to navigate the "complex and challenging global environment" the bank is facing.

HSBC reshuffles decks as it braces for more challenging times

HSBC, which is based in London, but generates much of its profit in Asia, saw its net profit drop by 24 per cent in the third quarter " the biggest quarterly drop since the fourth quarter of 2016 " as it reported weaker results in its retail banking and global markets operations.

Quinn has said he plans to accelerate efforts to cut costs and shift capital to more profitable business lines or regions, but has declined to discuss the size of any headcount reductions.

People familiar with the discussions previously said the bank was considering job cuts primarily centred in Europe and higher-paid roles globally.

Quinn singled out the bank's business in continental Europe, the US and the non-ring-fenced bank in the United Kingdom as not having "acceptable" performance in the third quarter. The bank has said it expects to have a "presence" in continental Europe and the US after its reshaping.

At the same time, Hong Kong, HSBC's largest market, has been embroiled in one of the city's worst political crises for more than five months, with anti-government protests and civil unrest disrupting transport and forcing the city's economy into a "technical recession" in the third quarter.

The bank has said its Hong Kong business was "resilient" in the quarter, but increased a provision for expected credit losses by US$400 million "to reflect the economic outlook in Hong Kong".

HSBC and several of its European competitors have struggled with the profitability of their capital intensive investment banks, particularly as markets have become more volatile against the backdrop of the US-China trade war, a weaker economic environment and more dovish central bank policy.

The global banking and markets segment at HSBC reported a 32 per cent drop in pre-tax profit in the third quarter.

Last year, a leaked memorandum purportedly written by unnamed HSBC executives called out the investment banking division, saying there was an "utter failure of leadership" in the business and that senior executives had "failed to create a successful strategy".

The memo singled out by name a veteran executive who had served as co-head of the global banking business since 2013. The executive left the bank earlier this year.

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