HSBC appointed its interim chair, Brendan Nelson, to that role permanently, the bank announced Wednesday in a filing with the Hong Kong stock exchange.
The move comes a day after CEO Georges Elhedery downplayed the likelihood that the 76-year-old Nelson would fill the role long-term.
“We've had a chair since the first of October in Brendan Nelson, who's expressed the desire not to do it for six to nine years given the stage of his career," Elhedery said Tuesday at a banking conference in London.
Nelson’s predecessor, Mark Tucker, announced in May that he would step down as HSBC chair by the end of the year. Tucker then took a non-executive chair role at Hong Kong-based insurer AIA Group, effective Oct. 1.
HSBC said its “robust process” to find a permanent chair “considered both internal and external candidates.” But the bank’s failure to hire someone from outside may come as a surprise. Several high-profile names, including former U.K. Chancellor of the Exchequer George Osborne and Goldman Sachs Vice Chair Richard Gnodde, had been rumored as candidates.
HSBC’s board had set aside two days this week to speak with candidates, including Osborne and Gnodde’s Goldman colleague, Kevin Sneader – the bank’s president of Asia-Pacific minus Japan, people familiar with the process told the Financial Times.
An Asia focus is seen as crucial for leading HSBC. The bank’s largest shareholder, Chinese insurance giant Ping An, had been a vocal proponent of spinning off HSBC’s Asian operations. The bank maintains a London headquarters and ranks as Europe’s largest bank (if U.K.-based lenders are included) but derives most of its profits from Asia.
Since becoming CEO last year, Elhedery has aligned HSBC’s operations under four pillars – separating its Hong Kong and U.K. units – but insisted the move is “not either a precursor or intention or preparation for any split.”
Asia experience is not particularly a strength for Nelson, who joined HSBC’s board in September 2023. He is, however, well-known in U.K. business circles, where he served on the boards of BP and NatWest. Before that, he worked for more than 25 years at accounting giant KPMG, including as global chair of banking and global chair of financial services.
"I look forward to continuing to work with the board, Georges and the wider management team as we deliver on our strategic and financial objectives," Nelson said in a statement.
In a note Tuesday, Shore Capital analyst Gary Greenwood said HSBC’s announcement “suggests that it has not been possible to find a suitable external successor.”
“Nevertheless, he is well qualified for the role and his appointment brings the process to a close and means that a governance issue has been sorted and the Group can move forward with some certainty,” Greenwood added.
John Cronin, an independent bank analyst at SeaPoint Insights, was far more blunt.
"This appears to have been an utterly haphazard selection process and points to a lack of succession planning for what is one of the most important roles in global finance," Cronin wrote in a note.
Ann Godbehere, a senior independent director on HSBC’s board who led the chair search, said Nelson “has demonstrated that his excellent leadership capabilities backed by his strong banking and governance credentials.”
Alicia García-Herrero, chief Asia-Pacific economist for French bank Natixis, described the HSBC chair role, in her note Tuesday, as “a multiyear commitment for a 76-year-old.”
“I imagine [Nelson] will continue to focus on expanding in Asia to the detriment of western operations,” García-Herrero wrote.
HSBC in October offered to pay $13.6 billion to buy out minority investors in Hong Kong-based Hang Seng Bank.
In addition to serving as chair, Nelson leads HSBC's audit committee – a role in which he’ll continue until the bank's 2025 results are published in February, according to the Hong Kong filing.
