ALEX BRUMMER: HSBC boss goes missing

ALEX BRUMMER: HSBC boss goes missing – Mark Tucker should emerge from shadows and explain to everyone exactly what is going on at the bank

  • Unacceptable that chairman is so far from the action at a time of change
  • Closure of quarter of branches shows it is rushing fences to slash expenses
  • HSBC also about to axe 15% of its 2,000 senior operations staff worldwide 

HSBC is much more than just another British bank. Its origins afford it central banking-like functions in Hong Kong. It acts as the trade bank for Western corporations shifting trillions of dollars between Hong Kong, New York and London each year. 

That alone is reason why it makes sense to resist pressure from its biggest investor Ping An, with an 8.3 per cent stake, to split its Asian operations from the other 60 territories in which it operates. 

Chief executive Noel Quinn acknowledges that HSBC gave serious consideration to Ping An’s proposal. He does not believe the Guangdong-based insurer is driven by Beijing. Anyone watching the way that China’s leader Xi Jinping has gone into reverse gear on freedoms in Hong Kong and Western-style capitalism might think otherwise. 

Under pressure: It is unacceptable that the chairman of a bank which has its headquarters in Canary Wharf and is regulated in London should be so far from the action at a time of change

The activist shareholder is exerting huge influence. The disposal this week of HSBC’s Canadian arm for £8.3billion to the Royal Bank of Canada looks another routine sale. 

But the Canadian arm is not part of a discarded imperial strategy. Focused on Vancouver, it originally served the expatriate Hong Kong and Chinese communities. Sell ing off Canada shows how seriously Quinn takes the Ping An threat. 

It has been a week of frenetic activity. In the UK, HSBC showed itself ready to sacrifice customer loyalty and service in the name of cost-cutting. 

The closure of a quarter of its branches, reducing its footprint to 327 outlets, shows it rushing the fences to slash expenses. Arguably, a better-equipped branch network can be a plus in the digital age. HSBC is also about to axe 15 per cent of its 2,000 senior operations staff worldwide. This may be understandable as it trims overseas interests, with New Zealand in line for the chop. 

If the changes are accompanied by investment in fintech, in the manner of global rival JP Morgan, it might be convincing. The concern is that Quinn is acting impulsively in the face of Ping An pressure. 

Amid the revolution, it would be just the moment for chairman Mark Tucker to emerge from the shadows in New York and explain to investors, customers and colleagues exactly what is going on. 

It is unacceptable that the chairman of a bank which has its headquarters in Canary Wharf and is regulated in London should be so far from the action at a time of change. 

Sitting it out on the bench should not be an option for the robust former professional footballer.

Spoils of war 

The Ukraine conflict is BP’s latest embarrassment after controversy over ‘cash machine’ surpluses, windfall taxes and climate change. 

Chief executive Bernard Looney needs to recognise that public sympathies over Russia’s war on Ukraine lie in Kyiv. That is why the UK is the biggest military backer of Ukraine after the US. But what to do? 

BP was swift to sever financial links to oil giant Rosneft as soon as the war broke out, writing off its £20billion stake. 

Yet there is little clarity as to where those shares now sit and who has taken control of BP’s £580m ‘blood money’ dividend. At the very least, BP should be making a public commitment that if the cash can be freed up (it is not clear how), it would contribute to Ukraine’s obvious need to rebuild its domestic energy structure. In focusing on BP, the economic adviser to President Zelensky opens up a broader front. 

The London Stock Exchange moved rapidly to suspend dealings in Russian stocks, such as steel and mining giant Evraz, on the outbreak of war. 

Payouts from these enterprises should be going to Western investors among others. 

The nation and Ukraine deserve clarity on where the proceeds are being held and the ultimate destination.

Spy school 

Who could not but be aware of the mismatch in Britain’s labour market between the 1.2m-plus vacancies and 625,000 or so citizens that have joined the ranks of the economically inactive since the pandemic? 

Those looking for adventure should check out an advert in the current issue of The Economist magazine for the Secret Intelligence Service (MI6). There are promises of living overseas, learning about other cultures and ‘tailored training’. 

The small print says candidates who disclose their application to others will be disqualified. Tough love!