Last checked at 
* Caretaker CEO, CFO call on staff to rally behind
management
* Employees, investors fear 'relentless' restructurings
By Sumeet Chatterjee and Sinead Cruise
HONG KONG/LONDON, Feb 19 (Reuters) - Noel Quinn, the interim
chief executive of HSBC, says this time things are
going to be different.
Unveiling the bank’s third overhaul since the financial
crisis, Quinn told Reuters this week that the latest revamp
would be less reliant on external factors, such as global
interest rates and China's economy.
"I believe this plan is predicated on three things we can
control, which are costs, simplification of the business, and
capital efficiency, rather than being dependent on revenue
growth assumptions influenced by the macroeconomic environment,"
he said.
Investors and HSBC employees aren't convinced.
In a call with staff on Tuesday, Quinn and Chief Financial
Officer Ewen Stevenson were put on the defensive over the bank's
commitment to the overhaul given that Quinn, the man unveiling
it, has not been made permanent.
"Internally, expectations had built up in the run up to the
strategy update that Quinn will be confirmed as the group CEO,"
said a person with knowledge of the call.
"But the way the whole thing is being handled ... it has
created more confusion about the strategy and whether the bank
will stick to it for the next three years even if there is a
change at the top."
HSBC's shares dropped 6.6% on Tuesday to their lowest level
in more than three years after the bank, which has struggled to
keep pace with leaner and more focused rivals, said it would
suspend buybacks for two years to pay for the restructuring.
Stevenson told employees that even if the markets didn't
have much conviction in the execution of the strategy, HSBC
staff would have to rally behind management to see it through.
HSBC declined to comment.
RELENTLESS
The London-headquartered bank, which makes 90% of its profit
in Asia, is shrinking its investment bank, cutting 35,000 jobs
and revamping its U.S. and European businesses, to remove $4.5
billion in costs.
HSBC veteran Quinn is auditioning for the permanent role of
CEO, which the bank said in August would be announced within six
to 12 months.
"This is a significant restructuring which is being driven
by an interim CEO who may not be the person that delivers it,"
one of the bank's 20 largest investors told Reuters, declining
to be named in line with his firm's media policy.
HSBC's Hong Kong shares dropped 1.3% on Wednesday,
while the London stock finished up 1.3%.
Against a backdrop of lower global growth and depressed
interest rates, a second investor among HSBC's 20 largest
shareholders said he was disappointed the bank was running hard
to stand still.
While withdrawing from investment banking businesses sounded
like a good idea, analysts pointed out that exits were often
expensive and complicated, and could lead to disposal losses
greater than the $1.2 billion HSBC has set aside.
"They are having to do a lot of heavy lifting and all this
restructuring just to hit the targets they had before. I know
there might be disappointment among the workforce but I'm not
sure management have much of a choice," the investor said.
"I think once they do this, they are going to have to do it
again. While this low interest rate environment persists, they
will have to keep hacking away at the cost base. It's going to
be relentless."
(Additional reporting by Lawrence White. Editing by Carmel
Crimmins)
