Jul 8, 2019

HSBC replaces US chief executive with Citi veteran

HSBC is replacing the chief executive of its US operation with a veteran of rival bank Citigroup as the lender tries to turn the struggling business round. The London-headquartered bank said Patrick Burke, 57, who has worked for HSBC since 1989, would retire as chief executive of HSBC USA in October and be replaced by Michael Roberts, an executive who has worked at Citi since 1986. The bank's US unit generated a return on tangible equity - an important measure of profitability - of just 2.7 per cent last year, well below the HSBC group figure of 8.6 per cent and significantly behind its US-based rivals. One executive familiar with HSBC's strategy in the US said "There was no easy fix", adding that the bank had too much capital trapped in its operation there. One top-20 investor described Mr Burkes' retirement as "a surprise" and noted the "Tremendous pressure" on HSBC to boost returns in the US. HSBC has had a chequered history in the US, owing in large part to its disastrous acquisition of subprime lender Household in 2003; after the US mortgage bubble burst in 2008, the bank wrote off more than the $14bn it paid for the business.

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