HSBC CEO Says Overhaul Strategy 'Is Working'
April 20 2018 - 11:45AM
Dow Jones News
By Margot Patrick
HSBC Holdings PLC Chief Executive John Flint spent the past
seven years watching the bank undergo a radical overhaul under
former boss Stuart Gulliver. On Friday, he signaled much of the
heavy lifting is done and that his leadership will be a period of
evolution not revolution.
"The strategy we have is working," Mr. Flint told shareholders
at an annual meeting in London. "But we now need to keep evolving
it and to deliver at pace."
Mr. Flint started as CEO in February after holding an array of
top posts in 29 years at HSBC. He took over a bank in pared-down
shape after exiting from dozens of businesses in the past several
years and withdrawing from countries where it lacked scale or
profitability.
On the sidelines of the shareholder meeting, Mr. Flint said he
is still working on a strategy update to present to investors this
summer. Analysts expect the plans to include more exits from
certain retail markets and a possible merger or acquisitions for
HSBC's asset-management arm, among other moves.
Mr. Flint played down any potential announcements about leaving
countries, saying it is unfair to employees and could diminish
returns from any sale.
"We just have to figure out what our priorities are going to be
and what our targets are going to be," he said. "We will
communicate as much as we reasonably can but it won't have a
forward looking list of everything we're going to do in the next
three years."
Mr. Flint said the bank can't realistically set any aggressive
new targets until it meets current ones such as reaching a 10%
return on equity. In 2017, the return was 5.9%.
"We've got to get to 10 first. Do I think the organization's got
the potential for more than that? Look at our business in Asia,
look at our business in the Middle East. The organization's got
potential for more, but you've got to be credible in getting to the
current target," he said.
The restructuring overseen by Mr. Gulliver marked a reckoning
for a bank that had grown far from its 1860s roots as a Hong Kong
trade bank into one of the largest in the world. Weakened both
financially and reputationally by a disastrous, pre-financial
crisis foray into U.S. consumer finance, and a $1.9 billion
settlement over inadequate anti-money-laundering controls, HSBC
renewed its focus on Asia and fast-growing parts of China.
Earlier this month, Mr. Flint took analysts on a tour of some of
the bank's businesses in China, and has indicated the country will
remain a key plank of growth plans.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
April 20, 2018 12:30 ET (16:30 GMT)
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