The British banking giant HSBC (HSBA) announced Monday the surprise departure of its boss John Flint and the loss of 4,000 jobs in the face of the many challenges to be faced between trade wars, Brexit and low rates.
The group said in a statement that John Flint had decided to leave his post of chief executive officer today in agreement with the board of directors.
HSBC has not given a specific reason for the sudden departure of Mr. Flint after less than two years in this position. But the group said a change at the top was needed, warning investors that a tough time was coming.
“In the increasingly complex and demanding global environment in which the bank operates, the board of directors believes that a change is necessary to face the challenges we face and to seize the very important opportunities that lie ahead. us,” said group president Mark Tucker, suggesting that Mr. Flint was pushed out.
During a conference call, Tucker said there was “no personal disagreement” or “strategy disagreement”.
“I felt, like the board of directors, that today’s good interim results indicate that it is the right time for a change, for me and for the bank,” said John Flint., 51 years old.
HSBC said it would seek a new executive both internally and externally and that Noel Quinn, head of the commercial banking division of HSBC, would be the acting managing director.
“Because of the macroeconomic and geopolitical headwinds, the HSBC board of directors may want more radical reforms, which remains to be seen,” said Nicholas Hyett, analyst at Hargreaves Lansdown.
The title of the bank reacted little and fell for its part of 1.32% to 637.60 pence around 6:20.
The group was not satisfied with the departure of its boss and took the opportunity to announce a restructuring plan in order to control its costs in this difficult market environment.
“We are announcing a restructuring program” and “this implies (a reduction) of 2% of our workforce”, or approximately 4,000 of the 200,000 employees of the group, explained chief financial officer Ewen Stevenson during the conference call.
These layoffs will affect 4% of the total amount of the group’s salaries and will cost between 650 and 700 million dollars this year to HSBC, which targets positions of responsibility.
Results on the rise
These announcements come at the same time as the publication, earlier than expected of the day, of results in increase for the first semester with a net profit in progress of 18.6% to 8.5 billion dollars, but accompanied by a great caution for the coming months.
“The outlook has changed,” warns the group in the press release presenting its results. He mentioned in particular the current rate cut in the United States, compressing the margins that banks make on loans, as well as geopolitical tensions.
HSBC, based in London, but active throughout the world and especially in Asia, is very vulnerable to the trade war between China and the United States, relaunched last week by the decision of Donald Trump to impose new rights. customs on Chinese products.
Brexit is the other major challenge raised by the bank, which is concerned about the “highly uncertain” nature of the nature and the impact of the exit from the EU.
All these challenges will force the bank to be careful when investing and spending, due to the risks weighing on its income. Flint’s strategy, however, was to launch a $ 15 billion to $ 17 billion investment plan to return to growth after long years of restructuring.
HSBC has finally decided to reward its shareholders by announcing the imminent launch of a share buyback program of up to $ 1 billion.