Georges Elhedery had only been back from a sabbatical a little over a month when HSBC chose him as heir apparent to the chief executive.
He had returned in September after six months of “personal development”, which included learning Mandarin, in what seemed a rare hiatus for such an experienced banker.
weeks later, HSBC announced that the 48-year-old will replace Ewen Stevenson as chief financial officer from January, a step up from his previous role as co-head of investment banking and a clear signal that he is ahead in the race for the highest position.
“We certainly did not expect [management] change,” said Hugh Young, Asia president of Abrn, a shareholder. “Anyone who is CFO would be a potential CEO candidate.”
Elhedery must now prove his worth as chief financial officer during a testing period for HSBC as it shifts resources from Europe and the Americas while fighting calls from its biggest shareholder to split Asian and Western operations form the bank.
His elevation end of October may have taken the market by surprise, but his colleagues say he has paid his dues as head of Middle East operations, markets and investment banking.
“To lead the activity in the markets, you have to be very bright and credible,” said a senior HSBC banker. “I think it was quite surprising when he took time off, but people respected that.”
Sam Johar, of executive search firm Buchanan Harvey, said: “The CFO change has destabilized the market, but wrongly so in this case.
Elhedery’s promotion has also fueled speculation that he will eventually replace chief executive Noel Quinn, who last week said the management changes were over succession planning, before adding that he had no intend to “resign any time soon”.
His predecessor, Stevenson, had been thought among the candidates to succeed Quinn and senior bankers at HSBC suggest he walked because he realized he was not in line for the job. Stevenson did not immediately respond to a request for comment.
His departure paved the way for Elhedery, but other senior bankers could still stand in his way.
“There are three who are potential CEOs,” said a former HSBC board member. “George; Nuno Matos, who is in Hong Kong and manages wealth globally and has done a fantastic job of cleaning up [the bank’s operations in] Mexico; and Colin Bell, who is managing director of Europe. Of the three, Georges must be the main candidate, because you can judge him as a financial director in front of investors.
As well as fostering some internal competition, succession planning will ensure Chairman Mark Tucker can avoid a repeat of the controversy when he ousted former chief executive John Flint in 2019 and left the post vacant for seven months. before Quinn’s appointment.
Elhedery grew up in Beirut, from a banker father and a teacher mother, before moving to France to study at the elite Parisian engineering school, École Polytechnique. He then cut his teeth on the trading floor in Germany by completing an internship at Caisse Des Dépôts, a French public sector bank.
Those who know him well describe a very intelligent and likeable banker.
“He is fluent in Arabic, French, English, German and Spanish,” said a former HSBC banker who worked closely with Elhedery. “He just did [mandarin] to have fun. That’s the kind of guy he is. He is also an avid snowboarder and has a pilot’s license. He does not shy away from big decisions, he is very pragmatic.
Before joining HSBC in 2005, Elhedery had worked at Goldman Sachs and Paribas.
Once on the doorstep, he quickly rose through the ranks working for Samir Assaf, his predecessor at the investment bank, and Mohammad Bin Mazyad Al-Tuwaijri, a Saudi politician who was the former head of the Middle East and HSBC North Africa. and Turkey from 2010 to 2016.
Elhedery won internal acclaim for his role in the anticipated $100 billion reduction in risk-weighted assets after being put in charge of the plan in 2020 as co-chief executive of global banking and markets. This success also helped earn his sabbatical.
In the brief period between returning from a sabbatical and the third quarter results, Elhedery worked closely with Quinn on special projects, the details of which were not disclosed. Prior to his hiatus, he led work on digital assets and participated in a central bank digital currency project.
The upheaval of HSBC and the rise of Elhedery comes as the bank is increasingly torn between China and the West and its main shareholder Ping An, the Chinese insurance company which owns more than 8% of the capital of the bank, asks him to spin-off its activities in Asia.
“HSBC positions itself as a bridge between East and West – unfortunately for them, the gap between the two has grown sharply over the last year or more. Not easy!” Young said to Abrn.
Elhedery will be based in London as Chief Financial Officer. And although his career at HSBC spans 17 years, Elhedery has not led an Asia business for the bank, which could prove another challenge, amid calls from Ping An to focus on the region.
The insurer complained this week that a number of senior HSBC bankers did not have enough work experience in Asia while making its calls for a public split for the first time.
Fostering a good relationship with Ping An will definitely be high on Elhedery’s to-do list. At the very least, it will be an opportunity for him to put the tangerine he picked up during his sabbatical to good use.