HSBC names Lebanon-born Georges Elhedery as CEO

He will replace Noel Quinn to be come the third chief executive at the banking firm in fewer than eight years

Georges Elhedery, HSBC's new chief executive. Reuters

HSBC has appointed its chief financial officer Georges Elhedery as its chief executive.

Although the global bank did consider external candidates, it opted to stick with tradition and promote from within.

Mr Elhedery has only been HSBC's chief financial officer for two years. Before he was co-head of the global banking and markets business, which accounted for 24 per cent of the group's revenue last year.

Born in Lebanon, Mr Elhedery began his career in banking as a rates trader before joining HSBC in 2005.

In his time at HSBC, he has also led the bank's Middle Eastern, North Africa and Turkey regional divisions.

Three years ago, he told The National's Arab Showcase series about his childhood in war-torn Beirut and the influence his father had on his upbringing.

“My Dad said that if I worked hard in my school and university years, all options would be available to me,” he said.

Somewhat prophetically, Mr Elhedery told The National three years ago that “you cannot stand still, you have to be on the front foot and take your destiny in your hand”.

Mr Elhedery will take up the chief executive position at the beginning of September, succeeding Noel Quinn, who will work closely with him to “ensure a smooth transition and an orderly handover of responsibilities”, HSBC said.

HSBC was quick to emphasise the “smooth transition” and continuity that Mr Elhedery's appointment represents. Analysts agreed that at a time when HSBC is moving from restructuring to a growth phase, a steady hand on the tiller was the best move.

“For most investors, continuity is essential, especially after the battles HSBC’s board has been through in recent years, to persuade shareholders that its strategy is right,” said Matt Britzman, equity analyst at Hargreaves Lansdown.

HSBC group chairman Mark Tucker described Mr Elhedery as an “exceptional leader and banker who cares passionately about the bank, our customers, and our people”.

“He has a track record of leading through change, driving growth, delivering simplification, containing costs and brings a strong focus on execution.”

Mr Elhedery originally studied engineering in Paris but moved to the trading floor in Germany.

He spent 10 years in Dubai, where he was named in the Financial News 40 Under 40 Rising Stars list.

“I am deeply honoured by the trust placed in me to lead this great institution into the future,” Mr Elhedery said on accepting the chief executive role.

“Working together with our talented team, I look forward to delivering exceptional value to our clients and investors by driving strong performance on a sustainable growth trajectory.”

China challenges

HSBC, which is Europe's largest lender by assets and has $3 trillion on its balance sheet, is looking for opportunities in Asia to enhance its profits.

Most of the group's revenue originates in Asia, as HSBC has spent the last 15 years ploughing resources into the region while at the same time exiting markets it deemed as being low-growth.

Given that, Mr Elhedery's relative inexperience in Asia raised some eyebrows. Others though, like Stanley Tsai, founder of Hong Kong-based investment advisory firm Antler Capital, were not surprised by the appointment.

“Some investors might've wanted someone with more direct Asia experience, especially with the Greater China portfolio, but it’s always been the non-Asia business that has presented the most overwhelming challenges,” he said.

It is thought that Mr Elhedery learnt Mandarin during a recent six-month sabbatical.

HSBC is particularly sensitive to the geopolitics between the West and Beijing and one of Mr Elhedry's first tasks will be managing the bank's exposure to China's lingering bad loans crisis, which led to a $3 billion impairment charge on HSBC's stake in Bank of Communications.

“While Asia is HSBC’s core focus, the new boss is a multi-linguist and has experience doing business in the Middle East which might come in handy if the bank wants to attract more of the region’s wealthy individuals,” said Dan Coatsworth, investment analyst at AJ Bell.

“Elhedery takes the wheel of a business in a good shape, but banking is a highly competitive industry and there is still a lot more to be done to make HSBC a stronger player on the battlefield.”

HSBC's shares, though slightly down on Wednesday morning, have risen 7 per cent over the past year, but have lagged behind the STOXX Europe banks index.

Shore Capital has a buy recommendation on HSBC shares, stating that the bank “now offers the most upside of the large UK banks we cover”.

HSBC is due to publish its latest results at the end of the month.