The world’s local bank has a new boss on its doorstep
It is just 4.3 miles from One Canada Square, HSBC Holdings’ headquarters, to 20 Gresham Street, the home of Lloyds Banking Group.
How fitting, then, that “the world’s local bank” should have no further to look than its near-neighbour for its next chief executive.
Mark Tucker, HSBC’s chairman, cautioned this week that his search for John Flint’s successor could take between six and 12 months.
The first part of the process should be far swifter. Antonio Horta-Osorio is ideally placed to take on the challenge of running Europe’s largest bank – a company still riven by the internal fiefdoms and sprawling bureaucracy that have been the biggest barrier to its evolution for decades.
When Stuart Gulliver, Flint’s predecessor, announced in 2017 that he would be stepping down, HSBC board members drew up a checklist of essential attributes that his replacement must possess.
Of those prerequisites, only significant experience in Asia is something Horta-Osorio lacks.
That should not be an insurmountable challenge. Horta-Osorio’s track record at Lloyds – reshaping an admittedly smaller institution, integrating strategically rational bolt-on acquisitions – puts him at the top of a short list of candidates.
The internal candidates to replace Flint do not benefit from the hinterland of running a corporate behemoth, while external rivals from the US would almost certainly price themselves out of a role at the top of a British company.
Horta-Osorio has another advantage: he and Tucker served together on the Court of the Bank of England, where they are said to have got on well.
That rapport highlights the fact that the Tucker-led decision to oust Flint was the right one.
Their relationship had been dysfunctional almost from the day they began working together, according to colleagues, and the chairman impressed upon boardroom colleagues the importance of acting swiftly.
HSBC’s advantageous position in some of the world’s fastest-growing economies risks being squandered without decisive leadership.
One example of the sluggishness of its decision-making is the perpetual wrestling with the future of its asset management business.
HSBC has explored mergers with several European rivals, and has only this week come to the end of a tortuous search for a new chief executive for the unit.
Horta-Osorio’s swift – albeit messy – termination of Lloyds’ asset management deal with Standard Life Aberdeen, and creation of a potentially valuable wealth joint venture with Schroders, provides a further point of contrast with the interminable bureaucracy of HSBC.
Whether he would be able, single-handedly, to inject the momentum that Tucker believes Europe’s biggest lender needs remains an open question – but he should be given the chance to try.
Unlucky battle of Wills?
Throwing good money after bad? It might prove to be an unlucky £13m that Mike Ashley’s Sports Direct International has spent on acquiring Jack Wills.
It’s hard to see the preppy fashion brand making a compelling difference to Sports Direct’s broader retail offering, while it adds more high street space to a group already struggling to deal with a surplus.
The timing is also frustrating for Ashley’s external investors who waded through the interminable rant in Sports Direct’s recent results in which he fired bullets at virtually everyone he has had dealings with in the last year.
More pertinently, Ashley’s unwillingness to step back from his prolific buying spree will make it harder for Sports Direct to secure a new auditor to replace Grant Thornton.
The incumbent plans to resign after the company’s annual meeting in October. It’s hard to see any other outcome than the Department for Business being asked to step in to appoint a new auditor. Extraordinary.
Superfunds not motoring
It has been a frustrating start to life for superfunds, the new breed of pension consolidators conceived as a way of reducing deficits in the UK’s vast final salary retirement fund arrangements.
The two main vehicles to emerge so far – Clara-Pensions, backed by an arm of buyout firm TPG, and the Pension Superfund, spearheaded by City financier Edi Truell – have found the going tough, largely because approval remains to be granted by regulators.
Progress on that front is expected in the autumn, but in the meantime the new entrants are busy striking deals with unwanted pension schemes.
Last month, the Pension Superfund announced that it had struck an agreement with an unnamed company to absorb £300m of defined benefit liabilities.
I understand that the scheme in question belongs to Hartwell, the used-car dealer. Coincidentally, the privately owned company marks its centenary this year.
At this glacial pace, superfunds might be allowed to demonstrate their potential by, say, the turn of the century.