HSBC chief executive John Flint has stepped down after the bank said it believed a change was needed “to meet the challenges” it faces.
HSBC also confirmed plans to cut 4,000 jobs globally – around 2% of its total workforce – after Mr Flint confirmed his departure after 18 months in the role.
John Flint was appointed in 2018 after a 30-year career in the bank's retail and wealth management business.
He will step down immediately, however, will remain available to assist the bank during the transition.
Noel Quinn, the head of HSBC’s global commercial bank, will take over the position as interim chief executive until a successor is appointed. Quinn “brings a track record of business success, strong client relationships and deep global expertise from his 32 years with HSBC,” the bank said.
The exact amount John Flint will get as a payoff remains unknown until he leaves the business. However, he will be entitled to 12 months’ salary and a “fixed pay allowance” of £3.3 million and “will be eligible to be considered for an annual incentive award”.
Mark Tucker, HSBC chairman, said: “On behalf of the board, I would like to thank John for his personal commitment, dedication and the significant contribution that he has made over his long career at the bank.
“Today’s positive interim results particularly reflect John’s achievements as group chief executive.”
Mr. Tucker also added that although HSBC “is in a strong position to deliver on its strategy”, a change of chief executive is a necessity.
Commenting on Mr. Flint’s departure, Mr. Tucker said on a conference call: “In the increasingly complex and challenging global environment in which the bank operates, the board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities ahead of us. This is a decision about the future”.
Mr Flint’s resignation came as HSBC announced its results of the first half of 2019. The report showed a rise in pre-tax profit of 15.8% to $12.4 billion (£10.2 billion) while the company’s profit after tax rose by 18.1% to $9.9 billion (£8.13 billion).
Ewen Stevenson, HSBC chief financial officer, told investors: “We’re not on track with the turnaround of our US business … The current returns on the US business is not acceptable.”
He added: “The US revenues outlook has become more challenged in recent months and we’re not expecting a 6% return on targeted tangible equity. Trade tensions between the US and China are progressively affecting the growth output in both markets.”
On Monday, HSBC also said it intends to initiate a share buy-back of up to $1 billion (£558 million), “which we expect to commence shortly”.
Mr Flint said it had been a privilege to spend his “entire career with HSBC”, adding he was “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 stated it has begun a search to find a new CEO and will be considering both internal and external candidates.