HSBC names new CFO as Q3 profits fall
HSBC on Tuesday named Georges Elhedery, a former head of its investment bank, as its new chief financial officer in a surprise move that leaves him in pole position to eventually succeed Chief Executive Noel Quinn. The sudden elevation of Elhedery, 48, at the London-headquartered bank comes after he took a six-month sabbatical in January, citing a desire to travel with his family and explore personal interests. Quinn said that while departing CFO Ewen Stevenson had done a good job restructuring the bank over the last three years, the move was done with succession in mind. Since his return to HSBC in September, Elhedery has been working on projects for Quinn. He is one of several Lebanese bankers to rise to the top ranks at HSBC, including his predecessor heading the investment bank, Samir Assaf. The change came as HSBC reported profits slid 42 percent in the third quarter, hit by rising loan losses as well as charges from the sale of its French business as it seeks to boost profits and placate unhappy investors. Shares of Hong Kong-listed HSBC, which makes the bulk of its sales and profit in Asia, fell 2.5 percent in a firm broader market . "There is no change in strategy as a consequence of these leadership changes," said Quinn, 60. "This is about how the group executive committee is positioned with potential succession options for the future." Stevenson, 56, will leave the bank next year. "I am looking forward to some time off and thinking about future options," he said. "Stevenson was undoubtedly seen as doing a great job amongst the investor community," said John Cronin, analyst at Goodbody. "His exit is most certainly a surprise and it smells of a fallout at the top management level in terms of direction of travel for HSBC – which will raise many questions," he said. The bank posted a pretax profit of US$3.15 billion for the three months ended September 30. That was down from US$5.4 billion a year ago, but well above the US$2.45 billion average of analyst estimates compiled by the bank. The results included a US$2.4 billion hit from the sale of the bank's business in France, part of a wider strategy by HSBC to excise parts of its once globe-spanning empire to boost profits. HSBC's net interest income swelled by 30 percent to US$8.6 billion, the highest in eight years mainly due to rising interest rates.  However HSBC reported a snag in its plan to woo shareholders with increased payouts, saying it needs to boost its core capital level of 13.4 percent back above 14 percent before it can resume buybacks and dividends. Quinn said he was "very confident" it could do this by the first half of next year, by increasing revenue and managing costs. (Reuters)