Georges Elhedery: HSBC’s heir apparent

Georges Elhedery had solely been again from sabbatical for simply over a month when HSBC forged him as inheritor obvious to the chief govt.

He had returned in September from six months of “private improvement”, which included studying some mandarin, in what appeared a uncommon hiatus for such a senior banker.

Weeks later, HSBC introduced that the 48-year-old would substitute Ewen Stevenson as chief monetary officer from January, a step up from his earlier position as co-head of the funding financial institution and a transparent sign he was forward within the race for the highest job.

“We definitely weren’t anticipating the [management] change,” mentioned Hugh Younger, Asia chair of Abrdn, a shareholder. “Anybody who’s CFO could be a possible CEO candidate.”

Elhedery should now show his value as finance chief throughout a testing interval for HSBC because it shifts sources away from Europe and the Americas whereas battling calls from its largest shareholder to separate the financial institution’s Asian and west operations.

His elevation on the finish of October might need taken the market without warning, however his colleagues say he has paid his dues heading operations within the Center East, markets and funding banking. 

“To steer the markets enterprise, you need to be very brilliant and credible,” mentioned a senior HSBC banker. “I feel it was fairly a shock when he took outing, however folks revered that.”

Sam Johar, of govt search agency Buchanan Harvey, mentioned: “The change of CFO has unsettled the market, however undeservedly so, on this case.”

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Elhedery’s promotion has additionally fuelled hypothesis that he’ll ultimately substitute chief govt Noel Quinn, who mentioned final week that the administration adjustments have been all about succession planning, earlier than including that he had no intention of “stepping down any time quickly”.

His predecessor, Stevenson, had been thought among the many candidates to succeed Quinn and senior HSBC bankers counsel he walked as a result of he realised he was not in line for the job. Stevenson didn’t instantly reply to a request for remark.

His exit has cleared a path for Elhedery however different senior bankers would possibly nonetheless be in his approach.

“There are three who’re potential chief executives,” mentioned a former HSBC board member. “Georges; Nuno Matos, who’s in Hong Kong operating wealth globally and did a incredible job cleansing up [the bank’s operations in] Mexico; and Colin Bell, who’s chief govt of Europe. Of the three, Georges should be the lead candidate, since you get to trial him because the CFO in entrance of traders.”

Other than fostering some inside competitors, the succession planning will guarantee chair Mark Tucker can keep away from a repeat of the controversy when he ousted former chief govt John Flint in 2019 and left the place unfilled for seven months earlier than Quinn’s appointment.

Elhedery grew up in Beirut, to a retail banking father and a faculty instructor mom, earlier than transferring to France to review on the elite Parisian engineering faculty, the École Polytechnique. He then minimize his enamel on the buying and selling flooring in Germany doing an internship at Caisse Des Dépôts, a French public sector financial institution.

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Those that know him effectively describe a extremely smart and personable banker.

“He’s fluent in Arabic, French, English, German and Spanish,” mentioned a former HSBC banker who labored carefully with Elhedery. “He simply did [mandarin] for enjoyable. That’s the kind of man he’s. He’s additionally a eager snowboarder and has a pilot’s licence. He doesn’t shirk the massive selections — he’s very pragmatic.”

Earlier than becoming a member of HSBC in 2005, Elhedery had labored at Goldman Sachs and Paribas.

As soon as within the door, he shortly rose by way of the ranks working for the likes of Samir Assaf, his predecessor on the funding financial institution, and Mohammad Bin Mazyad Al-Tuwaijri, a Saudi Arabian politician who was the previous head of HSBC’s Center East, North Africa and Turkey enterprise from 2010 to 2016.

Elhedery received plaudits internally for his position in slicing $100bn of danger weighted belongings forward of time after being tasked with the plan in 2020 as co-chief govt of world banking and markets. That success additionally helped earn his sabbatical.

Within the temporary interval between coming back from sabbatical and third-quarter outcomes, Elhedery labored carefully with Quinn on particular initiatives, the small print of which haven’t been divulged. Earlier than his break, he led work on digital belongings and was concerned with a undertaking on central financial institution digital foreign money.

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The shake-up at HSBC and Elhedery’s ascent comes because the financial institution is more and more torn between China and the west and as its largest shareholder Ping An, the Chinese language insurance coverage firm that has greater than an 8 per cent stake within the financial institution, calls on it to spin off its Asia enterprise.

“HSBC is positioned as a bridge between East and West — sadly for them the gulf between the 2 has widened sharply within the final yr or extra. Not simple!” mentioned Younger at Abrdn.

Elhedery will likely be based mostly in London as chief monetary officer. And whereas his HSBC profession spans 17 years, Elhedery has not run a enterprise in Asia for the financial institution, which may show one other problem, amid calls from Ping An to deal with the area.

The insurer this week complained that a lot of senior HSBC bankers didn’t have adequate expertise of working in Asia whereas making its requires a break up public for the primary time.

Fostering good relations with Ping An will nearly definitely be excessive on Elhedery’s to-do listing. On the very least, it is going to be an opportunity for him to place the mandarin he picked up throughout sabbatical to good use.