HSBC plans to appoint a new CEO by July

Takeaway points:

• HSBC hopes to select a new leader by July, considering both internal and external candidates, to replace outgoing CEO Noel Quinn.
• Under the UBS board reorganization, Iqbal Khan will lead wealth management in Asia Pacific and Rob Karofsky will lead wealth management in the Americas.
• As UBS expands its presence in the Americas and HSBC focuses on Asia, both companies are undergoing strategic changes to their leadership teams.

HSBC CEO Search

In an effort to make an appointment before the end of July, HSBC Holdings Plc is accelerating its search for a new CEO. The London-headquartered bank is assessing both internal and external prospects for replacing outgoing CEO Noel Quinn. Nuno Matos, director of global wealth and personal banking, and chief financial officer Georges Elhedery are the two internal candidates. In order to find the most qualified candidate for the position, the bank undergoes a rigorous benchmarking procedure.

“HSBC is conducting a robust and rigorous process to find the next group CEO. Internal and external candidates will be considered for this process. We will update market information as necessary,” the spokesman said.

An internal candidate could potentially stabilize the bank’s strategy, which has focused on shifting business to Asia while withdrawing from major Western markets such as Canada and France. The need to choose a new CEO comes from a desire to avoid a lengthy search similar to the six months it took to replace former CEO John Flint in 2019. Quinn, who announced his departure in April, has pledged to remain in the role until a smooth transition is ensured. He was considering his exhas been working for a few months and plans to continue his portfolio career after he leaves HSBC.

Changes in UBS management

UBS has announced major management changes aimed at preparing for the eventual succession of CEO Sergio Ermotti. The bank has split leadership of its wealth management division between Rob Karofsky, who will now oversee the Americas, and Iqbal Khan, who will now head Asia-Pacific. In the wealth management unit, both will be co-presidents.

“The (group executive management) appointments we are announcing today will enable us to further progress on our integration journey and realize expected synergies and efficiencies, while placing even greater emphasis on our long-term priorities and growth prospects, particularly in the Americas and Asia-Pacific ” Ermotti said in a memo to employees.

Ulrich Körner, CEO of Credit Suisse, and Naureen Hassan, president of UBS Americas, are also retiring as part of the reorganization. Körner, who oversaw Credit Suisse’s takeover by UBS, will leave once the two banks’ legal entities merge. As UBS looks to expand its footprint in the Americas – where it currently matches Wall Street rivals such as Morgan Stanley – Karofsky’s new position is critical.

Strategic implications

Meanwhile, both HSBC and UBS are undergoing major strategic changes and there have been changes in their leadership teams. HSBC’s focus on Asia and disinvestment from Western markets has been a sticking point, especially for shareholder Ping An Insurance Group Co., which has pushed for more radical changes. The appointment of a new CEO could strengthen or change this strategic direction.

On the other hand, UBS is keen to strengthen its management team to ensure a smooth transition following Ermotti’s final retirement, which is expected to occur no earlier than 2027. The bank’s decision to adopt a co-CEO structure for its wealth management unit reflects Morgan’s successful succession model Stanley, who recently named Ted Pick as CEO.