The chief executive of HSBC has stepped down after the bank said it needed a change in leadership to address a “challenging global environment”.
John Flint is giving up the role he has held for a year-and-a-half “by mutual agreement with the board”.
He will immediately cease his day-to-day responsibilities at HSBC, but will help with the transition as Noel Quinn takes over as interim chief executive.
Chairman Mark Tucker thanked Mr Flint for his “commitment” and “dedication”.
However, he said: “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.”
HSBC made the surprise announcement as it reported a 15.8% rise in pre-tax profit to $12.4bn (£10.2bn) for the six months to 30 June.
Mr Flint, who has worked at HSBC for 30 years, said: “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.”
The 51-year-old ran the bank’s retail and wealth management business before taking over as chief executive last year. At that time, Mr Flint was seen as a safe choice for the top job.
HSBC portrays itself as a conservative bank. Unlike some rivals, it has never pursued the wilder excesses of investment banking, and has a proud record of appointing its chief executive and chairman from within. It is part of the establishment in Asia and the West, and makes its money from the giant trade flows between.
With a 30-year track record at the bank, John Flint appeared the safest of hands when appointed 18 months ago. The bank’s shares have fallen during his tenure, but the increasing trade tensions between America and China explain most of the fall. Mr Flint will be a “good leaver” – meaning he keeps his entitlement to most of his share options – and which rules out any idea his departure is linked to misconduct.
Mr Flint was regarded as the favourite of his predecessor as chief executive, Stuart Gulliver – so it is possible that Mark Tucker, HSBC’s chairman, has simply decided he wants his own man in the job.
But the Huawei connection, although not confirmed by HSBC, cannot be discounted. In seeking to keep in the good books of the US authorities – which had a monitor embedded at the bank – HSBC provided the information that allowed America to apply for the extradition of Meng Wanzhou, Huawei’s chief financial officer. That cannot have pleased Beijing, and HSBC is reliant on China’s goodwill as much as America’s. Mr Flint may have been the necessary sacrifice.
Commenting on the current environment, HSBC said “the outlook has changed”.
It said that US interest rates were now expected to fall rather than rise and “geopolitical issues could impact a significant number of our major markets”.
It added: “In the near term, the nature and impact of the UK’s departure from the European Union remain highly uncertain.”
Mr Flint has a 12-month notice period, but it is not clear when his departure date will be, because he has “agreed to remain available to HSBC”.
HSBC has also granted Mr Flint “good leaver” status, which means he will be entitled to any stock options that vest after he exits the bank, provided he does not work at a competitor for two years.
The bank said it has begun a search to find a new chief executive and “will be considering internal and external candidates”.