HSBC Holdings on Monday announced the surprise departure of Chief Executive John Flint after just 18 months, saying that new leadership was needed at the bank as economic uncertainty grows and that it was cutting some 4,000 jobs to reduce costs.
London-based HSBC said Flint stepped down by mutual agreement. Noel Quinn, the bank’s CEO of global commercial banking, will serve as interim CEO while the bank looks for a permanent replacement.
Flint, 51, spent almost 30 years at the bank before he became CEO with the promise to “continue to innovate and accelerate the pace of change” needed to meet the demands of shareholders and customers. HSBC shares have sunk almost 14% since Flint took over, compared with a less than 1% drop in the FTSE 100 index.
The bank on Monday reported second-quarter profits of $4.4 billion, up 7% from the same period last year, but it warned that “geopolitical issues could impact a significant number of our major markets.” Economic growth is expected to slow in the United States and China amid the U.S.-China trade war. Asia accounts for 80% of HSBC’s profits. And Britain is preparing to leave the European Union on Oct. 31, raising uncertainty for the London-based business.
HSBC confirmed that on top of the leadership reshuffle, it plans to cut 4,000 jobs globally, or about 2% of its total workforce.
“With macroeconomic and geopolitical headwinds mounting, the HSBC board could be looking for more radical reform,” Nicholas Hyett, an analyst at Hargreaves Lansdown, said in a note to investors. “What that will look like remains to be seen.”
HSBC has sought to boost earnings by streamlining operations, cutting costs and increasing its focus on fast-growing Asian economies.
Chairman Mark Tucker said that while the bank is in a strong position to deliver on strategy, a change of leadership is necessary.
“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 before us,” he said.
Flint will be available to assist in the transition, HSBC said.