LONDON - As a former trainee professional soccer player, Mark Tucker is familiar with the concept of a hospital pass. That’s when a player gives the ball to a teammate who can easily be tackled, risking injury. The HSBC chairman has done the corporate equivalent to Noel Quinn, the global bank’s now-permanent chief executive.

HSBC on Tuesday confirmed Quinn as the $121 billion bank’s boss, a role he has performed on an interim basis since August, when Tucker ousted his predecessor John Flint for being slow to implement reforms. Quinn’s early tenure was marked by violent protests in HSBC’s core market of Hong Kong. In February he unveiled a new strategy to lift the lender’s return on tangible equity to between 10% and 12% by 2022, mostly by cutting costs and shifting capital away from the poorly performing European and American businesses.

The former commercial bank head will no doubt welcome the certainty after what amounted to a seven-month-long public job interview. But he may be hobbled by the board’s handling of the process.

First, his authority within the bank may have taken a knock after months in limbo. Tucker also considered several external candidates as part of the search process. These included UniCredit CEO Jean Pierre Mustier, who subsequently ruled himself out. Even if that was just a box-ticking exercise to make sure all options had been considered, Quinn could struggle to shake the perception that he was not the board’s first choice.

Second, he’s taking permanent charge amid a global virus-induced economic crisis, which has roiled financial markets and will probably push up bad debt and curb demand for new loans. HSBC’s shares have admittedly fared better than most peers: they’re down 16% this year, compared with a 36% fall for Standard Chartered and 50% for Citigroup. But a valuation that’s 80% of tangible book value, using the median 2020 estimate compiled by Refinitiv, suggests investors are sceptical that HSBC will earn a return above its probable 10% cost of equity for some time.

Managing through the crisis and hitting that target may mean deeper spending cuts and a quicker exit from low-returning businesses than Quinn envisaged just last month. Slow decision-making from his teammate Tucker has made the CEO’s life even harder.

CONTEXT NEWS

- HSBC on March 17 said it had appointed Noel Quinn as its chief executive, effective immediately.

- Quinn, who joined HSBC in 1987 and had been serving as interim CEO, will earn a basic salary of 1.3 million pounds per year.

(Editing by Peter Thal Larsen and Leigh Anderson)

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