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By Lawrence White
LONDON (Reuters) -HSBC Holdings Plc has appointed its Chief Financial Officer Georges Elhedery as its next CEO, the bank said on Wednesday, opting for continuity as it tries to kickstart growth.
Elhedery, 50, who becomes HSBC's third chief executive in less than eight years, will replace outgoing head Noel Quinn from Sept. 2. While the 160-year-old lender did consider external candidates, it has traditionally appointed its CEO from within.
"For most investors, continuity is essential, especially after the battles HSBC’s board has been through in recent years, to persuade shareholders that its strategy is right," said Matt Britzman, equity analyst at Hargreaves Lansdown.
Elhedery's appointment comes as the bank tries to shift from restructuring to growth, at a time when helpful interest rate hikes may have peaked and geopolitical tensions simmer.
Iain Pyle, senior investment director at HSBC shareholder abrdn, said Elhedery had made a good impression on the market over his 18-months as finance chief, and was "a clear communicator".
"It's a continuity appointment, but a strong candidate and I think will be taken well today," he said.
HSBC defeated a resolution last year backed by Chinese insurance giant Ping An and other Hong Kong-based shareholders who were seeking a spin-off of its lucrative Asia business.
Ping An, which owns 8.9% of HSBC according to LSEG data, declined to comment on Elhedery's appointment.
Lebanon-born Elhedery began his career in banking as a rates trader before joining HSBC in 2005. He led HSBC's Middle Eastern, North Africa and Turkey region between July 2016 and February 2019.
After that, he was the co-head of the Global Banking and Markets business, the division that houses HSBC's trading and investment banking advisory businesses, and accounted for 24% of the group's revenues last year.
In October 2022, he was unexpectedly appointed CFO, just weeks after returning from a sabbatical - a move that groomed him for the top job.
"Working together with our talented team, I look forward to delivering exceptional value to our clients and investors by driving strong performance on a sustainable growth trajectory," he said.
Quinn, who led HSBC for five years, will remain CEO until Elhedery starts in the role. At the time of his surprise exit announcement in April, he had said he wanted a better work-life balance and planned to pursue a portfolio career.
Quinn oversaw a raft of asset sales, navigated a global pandemic and the push by rebel investors to break up the bank, guiding the lender to record profit.