HSBC’s ideal new boss probably doesn’t exist

Half Marks. HSBC is a singular beast. The $167 billion bank is listed and headquartered in London, but makes most of its money in Asia, with clients ranging from Hong Kong savers to giant Western companies. No one possesses the long list of skills that would make them the perfect fit to run the group. That makes choosing its next CEO an exercise in compromise for Chair Mark Tucker, who is considering both internal and external candidates to replace the departing Noel Quinn.

Investors and people who know HSBC agree the perfect boss would be a readily available proven executive with experience of Western and Asian markets, and a solid understanding of the bank’s $3 trillion balance sheet and HSBC’s idiosyncratic culture. Headhunters working on such complex assignments often quantify candidates’ credentials across different factors. It’s an instructive exercise.

Breakingviews has graded potential internal and external CEO candidates by assigning them a score from nought to five in six different categories. None of them score full marks. Chief Financial Officer Georges Elhedery does best: his current role exposes him to everything from UK mortgages to Mexican trade finance. However, he hasn’t lived permanently in HSBC’s core market of Hong Kong or had sole responsibility for a key business line.

Other internal candidates – like retail and wealth boss Nuno Matos, investment banking head Greg Guyett and commercial boss Barry O’Byrne – score better on those fronts, but less well on others. Their experience at HSBC has focused on either the consumer or wholesale side.

By definition, none of the internal contenders has ever led a bank. If that matters most to Tucker, he could look at UniCredit CEO Andrea Orcel, Lloyds Banking Group’s Charlie Nunn or Helen Wong, who runs Singapore’s OCBC. The latter two CEOs have the benefit of previously working for HSBC.

But hiring from outside means compromising on availability. Rival executives will have non-compete clauses, which usually means lengthy gardening leave. The same is probably true for Simon Cooper, another HSBC alumnus who recently stepped down as head of corporate and investment banking at rival Standard Chartered. A long wait is not ideal for HSBC, which has not given investors financial guidance for 2025, and whose shareholders want to know what the growth plan is when interest rates fall.

The biggest test for any new boss will be dealing with rising tensions between China and the West while navigating HSBC, which has rejected numerous outsiders in the past. Working with Tucker, who is choosing his third CEO in less than seven years, is another challenge. The only consolation is that the ideal candidate probably does not exist.