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HSBC Set to Replace Investment Bank Chief Assaf in Overhaul

Alfred Liu, Harry Wilson and Stefania Spezzati
HSBC Set to Replace Investment Bank Chief Assaf in Overhaul

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HSBC Holdings Plc is set to replace its top investment banker as part of an overhaul by interim Chief Executive Officer Noel Quinn, according to people familiar with the matter.

Samir Assaf, 59, who has been head of global banking and markets for almost a decade, will be moved to a non-executive role at HSBC, said one of the people, who asked not to be named discussing an internal matter. The decision will be announced later this year or in early 2020, according to the person.

The Lebanese-born banker started leading the GBM division in 2011 and has been at HSBC and its predecessor firms for a quarter of a century. He is stepping back as Quinn, who’s seen as likely to make cuts at the investment bank, seeks to put his stamp on the company and keep the top job permanently, having replaced the ousted John Flint in August.

The sprawling lender, which makes almost 90% of its profit in Asia and employs 240,000 people, walked away from a key profitability target last month. It said write-offs are likely for some of its European business and previous sums spent on technology.

A spokeswoman for HSBC declined to comment. The move was earlier reported by the Financial Times.

HSBC has a bench of possible in-house successors to Assaf, should it decide to not seek external applicants. One candidate is Greg Guyett, an American who was hired by HSBC last year. The veteran of Asian-focused roles at JPMorgan Chase & Co. took sole control of global banking after Robin Phillips departed. Other possibilities include Georges Elhedery, head of global markets.

Chairman Mark Tucker recently told staff that the bank needed to improve profitability, saying 30% of the lender’s capital generated returns of less than 1%. Quinn’s restructuring -- HSBC’s third in a decade -- is likely to result in cuts to investment banking operations outside of HSBC’s core Asian markets. Continental Europe and North America are the main targets.

The Paris-educated Assaf began his career at Total SA, France’s biggest oil producer, and joined HSBC when the London-based bank acquired Credit Commercial de France in 2000. His ascent gathered pace after the 2006 departure of former top investment banker John Studzinski, who had been tasked with building the business into a global power -- an ambition that was later curtailed.

In 2006, Assaf became markets chief for Europe, the Middle East and Africa; two years later, he had been promoted to head of global markets. He succeeded Stuart Gulliver atop the investment bank when the latter was made HSBC’s CEO.

In recent years, global banking and markets has had a mixed financial performance and several conduct issues. Assaf’s division accounted for 28% of HSBC’s profit in 2018 -- a year that saw fixed-income trading revenue shrink from a year earlier, underperforming rivals including Barclays Plc.

In January 2018, the bank entered a U.S. deferred-prosecution agreement as part of a $100 million settlement of charges involving front-running foreign-exchange clients. The agreement required HSBC to cooperate with any investigation of the bank’s conduct.

Several of Assaf’s key lieutenants have departed recently, one after a high-profile sexual harassment case. Thibaut de Roux, who ran the markets arm before Elhedery, left in September 2018 after a junior female employee accused him of inappropriate conduct, people with knowledge of the matter said at the time. The Bank of England has warned HSBC for two years in a row that it hasn’t done enough to tackle concerns about how it handles risks including financial crime and staff conduct -- a caution Assaf himself discussed with executives on a recent conference call, according to people familiar with the matter.

The division was also rocked last year by an anonymous memo that criticized the leadership of Phillips, a key Assaf deputy for the past decade. Before that, high-profile Goldman Sachs Group Inc. dealmaker Matthew Westerman was brought in to shake up the business; after serving as global banking co-head with Phillips, he departed after less than two years.

(Updates with detail on Assaf’s possible replacement in sixth paragraph.)

--With assistance from Kiuyan Wong.

To contact the reporters on this story: Alfred Liu in Hong Kong at aliu226@bloomberg.net;Harry Wilson in London at hwilson57@bloomberg.net;Stefania Spezzati in London at sspezzati@bloomberg.net

To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Marion Dakers, James Hertling

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