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Insider Elhedery is a continuity choice

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CFO replacement to be named in due course

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Outgoing Quinn oversaw raft of asset sales

(Adds more details on CEO's background, paragraphs 11-15)

By Lawrence White and Roushni Nair

LONDON, July 17 (Reuters) - HSBC Holdings Plc ( HSBC )

has appointed its Chief Financial Officer Georges Elhedery as

its next CEO, the bank said on Wednesday, a choice that

highlights the global lender's preference for continuity as it

looks to kickstart growth.

Elhedery, 50, who becomes HSBC's ( HSBC ) third chief executive in

less than eight years, will replace outgoing head Noel Quinn

from Sept. 2. While the 160-year-old lender did consider

external candidates, it has traditionally appointed its CEO from

within.

Since 2020, Elhedery has been the co-head of the Global

Banking and Markets business, the division that houses HSBC's ( HSBC )

trading and investment banking advisory businesses, and

accounted for 24% of the group's revenues last year.

Lebanon-born Elhedery, who began his career in banking as a

rates trader before joining HSBC ( HSBC ) in 2005, was named the surprise

successor to Ewen Stevenson as CFO in October 2022, just weeks

after returning from a sabbatical.

He also led HSBC's ( HSBC ) Middle Eastern, North Africa and Turkiye

region as the CEO of that division between July 2016 and

February 2019.

"Working together with our talented team, I look forward to

delivering exceptional value to our clients and investors by

driving strong performance on a sustainable growth trajectory,"

he said in the bank's statement announcing his appointment.

Quinn, who led HSBC ( HSBC ) for five years, will remain CEO until

Elhedery starts in the role. At the time of his surprise exit

announcement in April, he had said he wanted a better work-life

balance and planned to pursue a portfolio career.

Quinn oversaw a raft of asset sales, navigated a global

pandemic and a push by rebel investors to break up the 160-year

bank, and guided the lender to record profit.

The move comes at a time when HSBC ( HSBC ), Europe's largest

lender by assets with a balance sheet of $3 trillion and in

relatively strong financial health, is betting on its historic

Asian ties to ramp up profit.

Since the financial crisis of 2008, HSBC ( HSBC ) has shrunk its

global footprint by around a quarter, exiting low-growth markets

to plough capital and resources into Asia, which accounts for

bulk of its revenues and profits.

CHALLENGES AHEAD

Stanley Tsai, founder of Hong Kong-based investment advisory

firm Antler Capital, said he wasn't surprised by the choice.

"Some investors might've wanted someone with more direct

Asia experience, especially with the Greater China portfolio,

but it's always been the non-Asia business that has presented

the most overwhelming challenges," he said.

That said, HSBC ( HSBC ) is highly sensitive to souring relations

between China and the West and delivering on growth ambitions in

Asia will be challenging at a time when China's economic growth

is slowing and the bank risks being embroiled in geopolitical

tensions.

Elhedery will also have to manage HSBC's ( HSBC ) exposure to

China's lingering bad loans crisis, which triggered a shock $3

billion impairment charge last February on the bank's stake in

Bank of Communications (BoCom).

He has relatively little direct work experience in Asia,

having spent the bulk of his HSBC ( HSBC ) career in roles across its

Middle East and Africa businesses, but did learn Mandarin during

his six-month sabbatical, according to sources at the bank and

media reports.

HSBC ( HSBC ) said it will announce Elhedery's successor as Group

CFO in due course. Ahead of the announcement, the bank was

exploring financial incentives and reallocating key projects to

retain those who miss out on the top job, two people with

knowledge of the discussions told Reuters.

HSBC ( HSBC ) will report its annual results on July 31.

The lender's shares in Hong Kong were trading mostly flat

after the announcement. HSBC's ( HSBC ) shares have risen 7% this year,

against an 18% gain in the STOXX Europe banks index.