Breakingviews - Ideal new HSBC chair would be opposite of its last
The lender is hitting its financial targets. CEO Georges Elhedery on Wednesday unveiled an 18.2% return on tangible equity for the first half of 2025, after excluding one-offs like a hit related to its stake in Bank of Communications. That's in line with his 'mid-teens' target for each year up to 2027. Investors seem broadly happy, despite a 3% selloff on Wednesday. HSBC trades at almost 1.4 times estimated tangible book value in 12 months' time, based on analyst forecasts gathered by LSEG, compared with less than 1 when Elhedery took the top job last year.
So when Tucker moves on in September he will be leaving a very different bank for his replacement to the one he joined in 2017. The former professional soccer player streamlined the board and ditched CEO John Flint in 2019 to turbocharge a revamp. Noel Quinn, eventually appointed as Flint's successor, slashed costs and ditched units like its Canadian business and French retail banking. Tucker then settled the CEO succession question by picking Elhedery.
But Ann Godbehere, the HSBC director running the search, appears to have hit a snag. The Financial Times recently reported, opens new tab that HSBC had launched a second sweep after struggling to find enough suitable candidates. Seasoned executives with strong Asian and Western connections are scarce.
The obvious move for Godbehere would be to go for another hard charger. Elhedery and his new finance chief Pam Kaur are unproven at the very top level. An experienced financial-services executive like former DBS (DBSM.SI), opens new tab CEO Piyush Gupta or HSBC's own erstwhile boss Stuart Gulliver could provide some firm executive guidance. So might ex-McKinsey head Kevin Sneader, currently president of Goldman Sachs' (GS.N), opens new tab Asia Pacific business outside Japan, ticking a key box for the Eastern-focused lender.
Those names may not be available, though. Pay won't help. Tucker's total remuneration last year was about $2 million, which is reasonable for a UK chair but implies a large stepdown for any sitting CEOs or high-flying bankers that Godbehere may approach.
Luckily, she can afford to widen the net. With no pressing need for a business overhaul, the key challenges now are mostly diplomatic in nature: keeping Ping An Insurance (601318.SS), opens new tab, its uppity largest shareholder, sweet and helping HSBC toe a careful line between Beijing and Washington. A heavyweight regulator could work, like Financial Conduct Authority Chair Ashley Alder, who used to run the Securities and Futures Commission of Hong Kong. Former policymakers have successfully led the boardrooms of UBS (UBSG.S), opens new tab and other major global banks.
Such an appointment would be a sharp break from HSBC's past. But it would also be a mark of how far the group has come.
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