Achi news desk-
Mr Quinn is to retire from HSBC after five “intense” years as chief executive, during which he has overseen the sale of its operations in Canada and Argentina under plans to streamline the business and focus more on Asia, where he has noted the most. growth potential.
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His departure was announced as HSBC reported better-than-expected first-quarter profits and announced it would return $8.8 billion to investors, which may have been the main reason why shares rose nearly 5% today . The shareholder distributions include an interim dividend of $0.10 per share, a special dividend of $0.21 per share from the sale of its Canadian business, and a new buyback of up to $3bn.
The bank’s pre-tax profit for the first quarter fell $0.2bn to $12.7bn, ahead of guidance.
Matt Britzman, an equity analyst at stockbroker Hargreaves Lansdown, noted that it had been an exciting time for Mr Quinn, who had taken over as the coronavirus pandemic broke out and had to “navigate geopolitical tensions between the United States and China, political unrest in Hong Kong, and plenty of shareholder challenges”. The latter included a push to spin off the bank’s Asian operations, seen at its annual meeting in May last year.
Mr Britzman said: “It may be a tough act to follow, but the market’s reaction suggests that the strong position it leaves behind is enough to quell any uncertainty about who will lead the business from here.
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“Looking at the results, there was a lot to unpack, as usual. The Canadian sale has been completed, which means that the special dividend is being released as expected. HSBC is moving ahead with plans to exit its Argentina business and has taken a $1.1bn hit in the process of redistributing it for account purposes. This is all part of the ongoing strategy to move away from non-core areas and focus more on Asia, which is where investors see the most potential. ”
The analyst added: “Remove some of the one-off items, and underlying performance was better than expected. As we have seen across the banking sector, impairment charges were lower than analysts had predicted. That’s particularly good news for HSBC, whose Chinese exposure has caused some problems in recent quarters. The absence of any material deteriorations or impairments related to Chinese commercial real estate is welcome.”
But Will Howlett, a financial analyst at Quilter Cheviot, said Mr Quinn’s departure introduced “an element of uncertainty about the future leadership of the bank”.
He said: “HSBC marked a strong start to the year with solid financial performance and impressive capital gains. However, the announcement has been overshadowed by the unexpected news that CEO Noel Quinn will be stepping down. This comes as a surprise, especially given Quinn’s relatively short tenure during which he led the bank through significant changes. Quinn’s departure introduces an element of uncertainty about the bank’s future leadership at a time when HSBC is navigating a complex global financial landscape.”
HSBC shares were trading at 699.7p, up 31.6p or 4.7% at 3pm.
