Elhedery to start his first day as global CEO in Hong Kong, showing city’s value to HSBC

Elhedery, 50, was born in Lebanon. He studied engineering at the École Polytechnique in Paris and holds a postgraduate degree in Statistics and Economics from the French École Nationale de la Statistique et de l’Administration Économique (ENSAE).

The banker, who speaks six languages including conversational putonghua, began his career in finance during the 1997 Asian Financial Crisis in Tokyo as a trader for Banque Paribas, before joining Goldman Sachs.

During the October 2023 announcement of HSBC’s third-quarter financial results in Hong Kong, Elhedery – then the bank’s chief financial officer – delivered his opening remarks in putonghua to the media. His words for HSBC’s share buy-back and dividends needed the aid of a 152-word transcript to decipher, but he was not shy about testing in a formal setting the language he picked up during a six-month sabbatical.

He joined HSBC in London in 2005, working his way up the ranks in roles that tapped his trading experience in London, Paris, Dubai and Tokyo. He was co-CEO of HSBC’s global banking and markets division before his appointment as chief financial officer in 2023, leading to his eventual promotion to CEO.

“Working together with our talented team, I look forward to delivering exceptional value to our clients and investors by driving strong performance on a sustainable growth trajectory,” he said in a statement after his promotion.

As CEO, Elhedery’s annual pay package will reach £3.22 million (US$4.24 million), including £1.38 million in basic salary, £1.7 million in allowance, and a pension of £137,600, according to the bank’s annual report. He is entitled to a performance bonus of up to £7.39 million, based on an annual incentive award of up to 215 per cent of his base salary and a long-term incentive award of up to 320 per cent of his base.

Quinn’s 2023 compensation totalled £10.6 million, according to HSBC’s report. By comparison, Citibank’s CEO Jane Fraser earned US$26 million last year, while Standard Chartered’s CEO Bill Winters earned £7.8 million, according to annual reports.

Elhedery said in media interviews that he usually exercises for at least an hour before he starts work. His free time is occupied by a variety of sports: jogging, hiking, mountain biking, swimming and snowboarding.

HSBC announced this week that it would split the role of Chief Operating Officer (COO) into two. Suzy White, the current COO for global banking and markets, will be in charge on an interim basis “while a formal recruitment process takes place,” the bank said.

Former Citigroup banker Stuart Riley was named the Group Chief Information Officer (GCIO), a new role created to shepherd data and innovation in the bank.

Elhedery faces a number of significant challenges. Decade-high interest rates, which drove HSBC to a record US$30 billion profit last year, are poised to fall when the US Federal Reserve meets on September 17 and 18.

“We want to know how the new CEO tackles the issues relating to the continuous geopolitical tension,” said KGI Asia’s head of investment strategy Kenny Wen. “The coming challenges he faces would be the interest rate cut, which is expected to begin in September.”

The banking industry is also undergoing a sea change, not least in HSBC’s key market of Hong Kong, where eight virtual banks are nibbling away at the dominance of bricks-and-mortar lenders. In response, HSBC expanded the reach of its PayMe digital payment platform by riding on the global network of UnionPay, the dominant Chinese financial services provider.

China’s largest insurer, which owns 7.98 per cent of HSBC, said the bank is “just one of the financial investments” in its portfolio, and said it hoped the new CEO would help improve the returns for the bank’s investors.

It is important for HSBC to not lose its focus on Asia, where the bank was first established almost 160 years ago, said Allan Zeman, the Canada-born founder of Lan Kwai Fong Holdings, who has called Hong Kong his home for decades.

Zeman said he has been a shareholder and customer of HSBC for more than half a century, adding that it is important for the bank to continue investing in Asia to achieve the best return for shareholders.

“I believe in the leadership ability of the new CEO as he has been with HSBC for almost two decades,” Zeman said. “Such international exposure and language skills set are vital as a leader for an international bank like HSBC.”