HSBC’s New Boss Faces Challenges From China and Brexit

John Flint, a lifer who rose to the top job at HSBC Holdings Plc in 2018, inherited an institution that had already seen shake-ups. In the previous seven years, 60,000 jobs had been eliminated and operations in 21 countries were sold, closed, or shrunk. Even so, the same core problem remains in the 67 countries where HSBC still does business: Costs are too high and revenue isn’t increasing fast enough.

Profit in the fourth quarter of 2018 came in 23 percent below analysts’ forecasts, stoking worries that Europe’s biggest bank by market value still lacks a recipe for growth. London-based HSBC has exposure to some of the world’s fastest-expanding markets—it was born as the Hongkong and Shanghai Banking Corp. in 1865 and derives 90 percent of its profits from Asia. And yet its return on equity is mired in the single digits, while U.K. rival Lloyds Banking Group has earned almost 12 percent even though it’s focused on Britain’s slumping domestic economy.