HSBC reshuffles European management ahead of CEO Quinn’s strategy revamp to shore up profits
- Stephen Moss to serve in new regional CEO role
- Strategy update due February 18 as part of annual results
HSBC Holdings is shaking up its ranks of senior executives in Europe ahead of a strategy overhaul by chief executive Noel Quinn later this month as the banking group seeks to shore up earnings amid stiffer competition.
Stephen Moss will serve in the new role of regional chief executive, overseeing the company’s business in continental Europe, the Middle East, North Africa, Turkey, Latin America and Canada beginning on March 1, it said in a statement on Thursday. Moss, who joined the bank in 1992, is group head of strategy and planning and Quinn’s chief of staff.
His new role will include “defining and overseeing the implementation of plans and priorities in region in support of the group’s strategy,” HSBC said.
As part of the reshuffle, Nuno Matos, who previously ran HSBC’s business in Mexico, will become CEO of HSBC’s UK bank and CEO of Europe on March 1. He replaces James Emmett, who will step down as CEO of HSBC Bank Plc on February 29, and retire on September 30 after 25 years at the bank.
The latest reshuffle follows major changes to personnel last year involving the head of investment bank, chief risk officer and chief operating officer. It is also seen as part of Quinn’s make-or-break strategy for Europe’s biggest bank by assets, which is expected to include job cuts in underperforming markets and reinvestment of some cost savings into growth markets, such as Hong Kong and mainland China.
Quinn is expected to deliver his strategy update on February 18 when HSBC unveils its 2019 annual results to stake his claim for a permanent role as the top boss. He was named interim CEO in August, replacing John Flint who was ousted after 18 months in the job.
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The strategy revamp comes as Hong Kong, HSBC’s largest market, has been hit by the double whammy of months of street protests and fears over the new coronavirus outbreak that has infected more than 28,000 people, mostly in mainland China.
On Wednesday, HSBC extended a restriction on employees travelling to the city for business until March 2 because of the worsening coronavirus outbreak. It has already curbed travels to mainland China, where the virus originated, until further notice.
“We expect some earnings pressure on the banking sector, depending on how this health crisis unfolds,” S&P Global Ratings credit analyst Shinoy Varghese said in a report on Monday.
Weakening economic activity in Hong Kong and China is likely to hit demand for credit, while interest margins could compress amid tight competition and low-interest rates, Varghese said. Increasing volatility in financial markets and a temporary shutdown of some bank branches may also crimp non-interest revenues, S&P added.
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Since then, HSBC has found itself in the crosshairs of some of Hong Kong’s radical protesters since Christmas Eve, after a police crackdown in December on a crowdfunding platform operated by Spark Alliance, which raised money to post bail and assist arrested demonstrators.
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Quinn has previously said he plans to accelerate efforts to cut costs and shift capital to more profitable business queues or regions but has declined to specify the number of any job losses.
Reuters has reported that HSBC was considering exits from Turkey and would review its presence in Latin America. HSBC has declined to comment.
In the third quarter, Quinn singled out the bank’s business in continental Europe, the US and its 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.
Once known in its advertising as the “world’s local bank”, HSBC has cut thousands of jobs and shrunk its global footprint from 87 countries to 65 and spent tens of millions of dollars since the global financial crisis.
It also has been forced to revamp its compliance following a scandal over its money-laundering controls that saw it pay US$1.9 billion in a 2012 settlement with US authorities. A deferred prosecution agreement with US prosecutors, which allowed the bank to avoid criminal charges, expired in 2017.
In addition to reviewing the bank’s business queues, Quinn has also has been reshuffling management in recent months as he looks to put his stamp on the bank.
