* AIA Group boss Mark Tucker named HSBC chairman
* Tucker will take over as group chairman Sept. 1
* Tucker to identify successor to CEO Gulliver
* HSBC shares up 0.9 pct at 1150 GMT
(Releads, adds London shares, investor reaction, board member
By Sumeet Chatterjee and Lawrence White
HONG KONG/LONDON, March 13 HSBC broke
with tradition by choosing outsider Mark Tucker to replace
Douglas Flint as chairman later this year, handing the AIA Group
boss the task of selecting a new chief executive for
Europe's biggest bank in 2018.
A one-time professional footballer and insurance industry
veteran who once led Britain's Prudential, Tucker will
take over as the bank's first-ever external chairman on Oct. 1.
HSBC shares were 0.9 percent higher on Monday by 1150 GMT on
news of Tucker's appointment, as investors welcomed the choice
of the Asia veteran as a signal it could intensify its shift
towards the region and lower-risk income streams.
"As a top five long term shareholder, we have been involved
in the process and are pleased to see a highly regarded and
fresh independent chair for HSBC," said Sacha Sadan, director of
corporate governance at Legal & General Investment Management.
Flint's departure will end one of the longest-serving
management partnerships at a major global bank, as HSBC Chief
Executive Stuart Gulliver is also due to leave in 2018.
"The appointment of a safe pair of hands like Tucker
potentially signals an increasing focus on steadier,
annuity-style income streams where HSBC has a competitive
advantage and which are also set to benefit as interest rates
rise," Benjamin Quinlan of Hong Kong consultancy Quinlan &
Identifying a successor for Gulliver will be one of the
first tasks for Tucker, who will receive an annual fee of 1.5
million pounds ($1.83 million) in addition to standard benefits.
His basic salary at AIA in 2015 was $1.5 million, but
short-term and long-term incentives could bring that total as
high as $9.9 million, according to AIA's latest annual report.
Gulliver, in common with many global bank CEOs, has not
clearly nurtured an obvious successor-in-waiting within the
lender's senior management ranks, leaving the door open to a
number of his lieutenants or an outside candidate.
Leading internal candidates include Europe chief Antonio
Simoes and retail and wealth management head John Flint. Former
Goldman Sachs banker Matthew Westerman is seen by some
internally as a candidate, despite overseeing a relatively small
part of HSBC's investment bank.
Among external possibilities, Lloyds Chief
Executive Antonio Horta-Osorio is frequently cited by investors.
"We have been developing some strong internal candidates but
you would always expect for a group of this size to benchmark
them and look externally as well," Sam Laidlaw, an independent
board member who also chairs HSBC's pay committee, told Reuters.
Tucker's main challenge will be to oversee a return to
profit growth. HSBC's overall return on equity slumped last year
to less than one percent, compared with 7.6 percent the year
before and far short of a long-term target of 10 percent.
The bank only earns returns above that target in Asia among
its geographical businesses, and only in retail banking and
wealth management among its divisions.
Other obstacles include low demand for loans in its twin
home markets of Britain and Hong Kong, reflected in a
loan-to-deposit ratio of 67 percent, below most of its peers.
HSBC also faces slowing growth in China, dampening hopes for
an Asia pivot strategy announced last year.
While HSBC’s share price has barely risen during the tenure
of Flint and Gulliver, the pair can point to successes,
including the shrinking of the bank following a pre-2008 era of
excessive empire-building and a clean-up of its culture.
The pair slashed over 43,000 jobs and sold assets worldwide
as they attempted to shrink the group back to profitability amid
a tough environment for global banks.
With more than $1.2 trillion in customer deposits, HSBC has
suffered more than most from low global interest rates which
have made it difficult to invest deposits profitably.
HSBC's full-year profit fell 62 percent, far short of
forecasts, last month as it took restructuring writedowns and
flagged near-term brakes on revenue growth.
($1 = 0.8219 pounds)
(Additional reporting by Michelle Price in Hong Kong and Anusha
Ravindranath in Bengaluru; Editing by Stephen Coates and