Banks

RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Financial

Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Categorized | Banks

HSBC kicks off search for next chief but one


Posted on September 25, 2016

An HSBC logo sits on display outside an HSBC Holdings Plc bank branch in London, U.K., on Tuesday, June 9, 2015. HSBC will eliminate as many as 50,000 jobs through 2017 by shrinking its global reach as Chief Executive Officer Stuart Gulliver seeks to cut annual costs by about $5 billion to restore profit growth. Photographer: Simon Dawson/Bloomberg©Bloomberg

HSBC has kicked off the search for its next-but-one chief executive by hiring a headhunter to assess the strength of its most promising managers and benchmark them against the best rivals externally.

Europe’s biggest bank by market capitalisation is determined to avoid the chaotic succession process that occurred in late 2010, when the bank — which had prided itself on discretion and smooth internal governance processes — saw boardroom squabbles spilled out into the media. 

    HSBC has mandated Russell Reynolds, a leading City of London recruitment firm, to look for gaps in its roster of up-and-coming executives and to search for candidates to fill them. 

    This comes amid mounting speculation about the likely replacements for HSBC’s current chairman Douglas Flint and chief executive Stuart Gulliver, who are expected to hand over the reins next year and in 2018, respectively. 

    The new process is not aimed at identifying successors for Mr Gulliver, but will look further ahead to ensure that there is a strong bench of promising managers ready to take over from whoever is the next CEO. 

    “It is way too soon to be involved in Stuart Gulliver’s succession, but we would expect to be involved when that does happen,” Dee Symons, a member of the financial services practice at Russell Reynolds, told the Financial Times. 

    John Flint, head of HSBC’s retail and wealth management division, is seen as the favourite to replace Mr Gulliver. But younger executives are jostling for position, including Antonio Simoes, head of HSBC’s main European operation, and Matthew Westerman, the former Goldman Sachs banker hired by HSBC this year to run part of its investment bank. 

    Earlier this year, HSBC lost one of its most promising executives when Simon Cooper quit as its head of commercial banking to join rival Standard Chartered. 

    “The financial services industry has not historically been seen as the gold standard in this area,” said Ms Symons. “But now regulators, as well as the banks themselves, are increasingly focused on succession planning.” 

    HSBC has pledged that its next chairman will be an outsider to the bank’s executive ranks, breaking with tradition, though the choice is likely to be made from among the board’s non-executives. 

    Henri de Castries, the former CEO of French insurer Axa, joined the HSBC board this year as a non-executive director and is the favourite to succeed Mr Flint next year. But that could hinge on the outcome of next year’s French presidential election, as Mr de Castries may be offered a senior post in the next government.

    Mr Gulliver recently abandoned the 10 per cent return on equity target he set only last year as the bank grapples with a sector-wide squeeze on profits from record-low interest rates. However, shares in HSBC have rebounded since the Brexit vote in June, gaining more than 30 per cent in three months, helped by its high dividend yield.