HSBC Shares Slide After Group Announces Departure of CFO Ewen Stevenson

By Scott Kanowsky — HSBC Holdings PLC (LON:) has announced that chief financial officer Ewen Stevenson will step down from the role at the end of 2022, as the lender looks to overhaul its leadership team with the end of a multi-year plan to transform the business approach.

In a statement, the bank said Georges Elhedery, who currently jointly helms HSBC’s global banking and markets unit, will assume the position of CFO from Stevenson on January 1 next year. Stevenson, meanwhile, will leave the group in April 2023.

“[Stevenson] has been instrumental in materially repositioning the Bank’s strategy and performance, whilst also transforming the Finance function,” said chief executive officer Noel Quinn.

Guy Guyett will subsequently take over as CEO of the global banking and markets division.

The shake-up comes as HSBC nears the conclusion of a three-year program to shift assets from the West to Asia and the Middle East in a bid to boost performance.

The bank has sold its French retail business to private equity firm Cerberus. It is aiming to exit its operations in Greece as well and has reportedly started a review of its Canadian business.

HSBC also faces intense pressure from Chinese insurer Ping An (SS:), its biggest shareholder, to split the group into two segments: One focused on Asia and the other on the West. Ping An has claimed doing so will generate up to $35B in added market value for the wider group.

The bank’s executives have said they are constantly in dialogue with Ping An about its proposal but have not yet agreed to the change.

Shares in HSBC dipped by more than 7% in early afternoon trading on Tuesday.

Also factoring into sentiment around the stock was HSBC’s , which included a slight downgrade to its guidance for net interest income in 2023.

The lender now expects the figure – which measures the difference between interest payments on assets and liabilities – to be at least $36B, down from its prior estimate of at least $37B. It blamed the cut on depreciation in against the U.S. dollar, as well as higher cost of funding in its trading book.

However, expected upcoming interest rate hikes by central banks around the world led HSBC to increase its estimate for its current year net interest income to $32B from $31B.

Meanwhile, quarterly reported pre-tax profit fell to $3.1B but still beat analyst estimates. Much of the decline was due to a $2.4B impairment charge related to the sale of the French retail division.

A provision for expected credit losses of $1.07B was also taken out, up from $659M in the same period last year.

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