Georges Elhedery, HSBC’s newly appointed CEO, is expected to maintain a strategic focus on the bank’s pivot to Asia while grappling with geopolitical risks. His experience in the Middle East could come in handy.

Yesterday, HSBC announced the long-awaited appointment of a successor to group CEO Noel Quinn. Effective September 2, Georges Elhedery will take over as the London-based banking giant’s new boss. Elhedery joined HSBC in 2005 and before becoming chief financial officer (CFO) in 2023, he held various senior roles including CEO of the group’s Middle East, North Africa, and Turkey (MENAT) region.

While HSBC has repeatedly reiterated that it will continue to play the role of a connector between the East and the West, persistent geopolitical risks are inevitable. Elhedery’s experience in the Middle East could be a difference maker. 

China-MENAT Corridor

Links between China and the West have been facing several challenges in recent years, ranging from supply chain transformations to shrinking technological access. This undoubtedly creates risks for HSBC which generates more than half of its annual profit from Hong Kong and the UK.

But at the same time, China has been steadily building ties with other economies, most notably in the Middle East. And HSBC itself has repeatedly touted the China-MENAT corridor as a significant opportunity, calling Hong Kong in a report a potential «major gateway for investments between the Middle East and mainland China».

«The need for the Middle-Eastern nations to invest their oil wealth to create the infrastructure needed for their transformation could produce business opportunities for companies from China,» the bank said. «At the same time, Mainland Chinese and other international investors keen to participate in new projects in the region could use Hong Kong’s financial infrastructure and know-how to gain that exposure.» 

Ping An Share Sale

Aside from business opportunities and hedges to geopolitical risks, Elhedery familiarity with the Middle East could be useful for dealing with potential new shareholders.

According to a «Bloomberg» report citing unnamed sources, Ping An is mulling options to reduce its 8 percent stake in HSBC, including a sale to a sovereign wealth fund or ultra-rich investor in the Middle East. HSBC has had a rocky relationship with the Chinese insurance giant which previously called for a breakup of the British lender via a spinoff of its Asia business.  

Personal Background

In addition to professional experience, Elhedery also has close personal links to the Middle East. He was born in Lebanon during the civil war and speaks Arabic, alongside a handful of other languages including English, French, German, Spanish and Japanese.

Although he does not have equal familiarity in Asia with limited direct experience, his linguistic prowess could come into play again. In 2022, Elhedery took a six-month sabbatical during which he reportedly obtained conversational Mandarin skills.