HSBC Hires Michael Roberts From Citi to Replace U.S. Chief

(Bloomberg) -- The head of HSBC Holdings Plc’s U.S. unit unexpectedly retired and is being replaced by a senior banker from Citigroup Inc. as a turnaround of the business rumbles on.

Patrick Burke will be succeeded by Michael Roberts, who has been at Citigroup for more than 30 years and has been in roles including chief lending officer, according to an HSBC statement on Monday.

HSBC’s North American unit has been a source of problems for the lender for several years due to bad debt charges. Speaking in May, Ewen Stevenson, the bank’s chief financial officer, highlighted the U.S. as one of the areas where the bank faced its “biggest strategic challenge at the moment in terms of returns.”

Burke “has been instrumental in our U.S. turnaround plan and the positive progress we’ve made,” said HSBC Chief Executive Officer John Flint in the statement.

Flint and Stevenson are attempting to improve returns by cutting costs after the bank missed targets last year. In recent months the bank has implemented a program, known internally as “Project Oak”, to encourage managers to seek out cost savings. That has led to job losses, including several hundred in its global banking and markets division.

In a memo to staff seen by Bloomberg News, Burke said: “As I make this transition, I acknowledge that we are in the midst of an important transformation in the United States. We are executing a significant turnaround effort and everyone continues to work tirelessly day in and day out.”

HSBC makes the vast majority of its profits in Asia. Last year, North America represented just over 11% of HSBC’s net revenue and 4% of pretax income.

Ratings agency Moody’s Investors Service wrote in March of problems at HSBC USA, saying its asset base was “very liquid but low-yielding” and pointing to problems including “compliance costs related to previous risk management and control failures.”

To contact the reporters on this story: Harry Wilson in London at hwilson57@bloomberg.net;Stefania Spezzati in London at sspezzati@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion Dakers, Keith Campbell

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