Hancock might not be the man for HSBC

Sometimes, the wrong person for the job has the perfect background.
HSBC Holdings Plc might confront that issue if its approach to Peter Hancock results in the former American International Group Inc. boss being picked to replace Stuart Gulliver as chief executive.
A duo of Mark Tucker, the incoming chairman, and Hancock as CEO would give HSBC its first leaders from outside the bank in its more than 150-year history — and two insurance executives, at that.
While Hancock left AIG following an unexpected $3 billion fourth-quarter loss, there’s a lot to recommend him as HSBC emerges from five years of declining revenue.
The former JPMorgan Chase & Co. fixed-income head would be a useful addition right after HSBC managed to score the first foreign-controlled Chinese securities venture.
More importantly, he understands Asia, having been raised in Hong Kong, a major source of revenue at Europe’s biggest bank by assets. His background would mark a commitment to HSBC’s Asian roots, one year after the controversial decision to keep its domicile in London. The Asian units accounted for 74 percent of adjusted pretax profit last year, up from 65 percent in 2014. For one, Hancock wasn’t an unqualified success steering AIG, which is a far cry from the powerhouse it was before the global financial crisis. And while his three years atop AIG would be helpful in building the insurance operations, HSBC remains largely a retail and trade-finance bank.
An executive with more consumer clout would be better for HSBC’s retail-banking and wealth-management division in an era of rising interest rates.
Whatever the case, HSBC’s next chief must do something with all that money, even as rising rates help with net interest margins. Despite a mortgage boom in Hong Kong, Asia-wide growth in home lending was only 2 percent, and the bank’s loan-to-deposit ratio is just 68.8 percent.
An insider with the right relationships across the sprawling bank would have an easier time sustaining revenue growth. Some fintech savvy would help, too, in the new world of digital banking. But one outsider at the top is
probably enough.

—Bloomberg