Georges Elhedery: HSBC’s heir apparent

Georges Elhedery had only been back from sabbatical for just over a month when HSBC cast him as heir apparent to the chief executive.

He had returned in September from six months of “personal development”, which included learning some mandarin, in what seemed a rare hiatus for such a senior banker.

Weeks later, HSBC announced that the 48-year-old would replace Ewen Stevenson as chief financial officer from January, a step up from his previous role as co-head of the investment bank and a clear signal he was ahead in the race for the top job.

“We certainly weren’t expecting the [management] change,” said Hugh Young, Asia chair of Abrdn, a shareholder. “Anyone who is CFO would be a potential CEO candidate.”

Elhedery must now prove his worth as finance chief during a testing period for HSBC as it shifts resources away from Europe and the Americas while battling calls from its largest shareholder to split the bank’s Asian and west operations.

His elevation at the end of October might have taken the market by surprise, but his colleagues say he has paid his dues heading operations in the Middle East, markets and investment banking. 

“To lead the markets business, you have to be very bright and credible,” said a senior HSBC banker. “I think it was quite a surprise when he took time out, but people respected that.”

Sam Johar, of executive search firm Buchanan Harvey, said: “The change of CFO has unsettled the market, but undeservedly so, in this case.”

Elhedery’s promotion has also fuelled speculation that he will eventually replace chief executive Noel Quinn, who said last week that the management changes were all about succession planning, before adding that he had no intention of “stepping down any time soon”.

His predecessor, Stevenson, had been thought among the candidates to succeed Quinn and senior HSBC bankers suggest he walked because he realised he was not in line for the job. Stevenson did not immediately respond to a request for comment.

His exit has cleared a path for Elhedery but other senior bankers might still be in his way.

“There are three who are potential chief executives,” said a former HSBC board member. “Georges; Nuno Matos, who’s in Hong Kong running wealth globally and did a fantastic job cleaning up [the bank’s operations in] Mexico; and Colin Bell, who is chief executive of Europe. Of the three, Georges must be the lead candidate, because you get to trial him as the CFO in front of investors.”

Apart from fostering some internal competition, the succession planning will ensure chair Mark Tucker can avoid a repeat of the controversy when he ousted former chief executive John Flint in 2019 and left the position unfilled for seven months before Quinn’s appointment.

Elhedery grew up in Beirut, to a retail banking father and a school teacher mother, before moving to France to study at the elite Parisian engineering school, the École Polytechnique. He then cut his teeth on the trading floor in Germany doing an internship at Caisse Des Dépôts, a French public sector bank.

Those who know him well describe a highly intelligent and personable banker.

“He’s fluent in Arabic, French, English, German and Spanish,” said a former HSBC banker who worked closely with Elhedery. “He just did [mandarin] for fun. That’s the type of guy he is. He’s also a keen snowboarder and has a pilot’s licence. He doesn’t shirk the big decisions — he’s very pragmatic.”

Before joining HSBC in 2005, Elhedery had worked at Goldman Sachs and Paribas.

Once in the door, he quickly rose through the ranks working for the likes of Samir Assaf, his predecessor at the investment bank, and Mohammad Bin Mazyad Al-Tuwaijri, a Saudi Arabian politician who was the former head of HSBC’s Middle East, North Africa and Turkey business from 2010 to 2016.

Elhedery won plaudits internally for his role in cutting $100bn of risk weighted assets ahead of time after being tasked with the plan in 2020 as co-chief executive of global banking and markets. That success also helped earn his sabbatical.

In the brief period between returning from sabbatical and third-quarter results, Elhedery worked closely with Quinn on special projects, the details of which have not been divulged. Before his break, he led work on digital assets and was involved with a project on central bank digital currency.

The shake-up at HSBC and Elhedery’s ascent comes as the bank is increasingly torn between China and the west and as its largest shareholder Ping An, the Chinese insurance company that has more than an 8 per cent stake in the bank, calls on it to spin off its Asia business.

“HSBC is positioned as a bridge between East and West — sadly for them the gulf between the two has widened sharply in the last year or more. Not easy!” said Young at Abrdn.

Elhedery will be based in London as chief financial officer. And while his HSBC career spans 17 years, Elhedery has not run a business in Asia for the bank, which could prove another challenge, amid calls from Ping An to focus on the region.

The insurer this week complained that a number of senior HSBC bankers did not have sufficient experience of working in Asia while making its calls for a split public for the first time.

Fostering good relations with Ping An will almost certainly be high on Elhedery’s to-do list. At the very least, it will be a chance for him to put the mandarin he picked up during sabbatical to good use.