Written by Sinead Cruise and Lawrence White
LONDON (Reuters) – HSBC’s record-breaking new chief financial officer, Pam Kaur, is vulnerable and a veteran accountant who credits her success to the “Power of Chi”.
The first woman in the bank’s 160-year history, she has seen first-hand the challenges HSBC faces under new CEO Georges Elhedery, as it navigates the interest rate cycle and strained relations between China and the West.
Indian-born Kaur, 60, joined HSBC from Deutsche Bank in April 2013, rising to chief risk and compliance officer before being promoted to her new role announced on Tuesday.
Prior to HSBC, Kaur held senior risk and audit positions at Citi and Lloyds Banking Group (LON:) before the crisis at bailed-out UK lender Royal Bank of Scotland (NYSE:).
A post on professional networking platform LinkedIn offers a glimpse of Kaur’s potential management style, with courage and confidence described as key elements of effective leadership under the “Power of Chi” management framework she has promoted to more than 10,000 followers.
He will need all the chi, or positive energy, he can muster as global lenders such as HSBC struggle to defend strategies from geopolitics, containing the ongoing costs of doing business while trying to find new sources of revenue.
“I’m not sure you could find a large group of banks that were facing burning issues, and you were in finance, audit or risk of all of them,” one former colleague commented. Kaur’s rich experience.
“You don’t want someone in a senior position to see bad things for the first time. You need someone who has been there, who has faced live bullets before going to war,” said the person.
Kaur is expected to keep a low public profile as CFO, giving newly installed CEO Elhdedery space to focus on client-facing tasks including winning major business from HSBC’s corporate clients, the sources said.
However, the London-based executive, who holds an MBA from India’s Panjab University, will not be an inspiration when it comes to strategy, the sources said, and will bring a wealth of experience to HSBC’s future direction.
Elhedery said Tuesday’s restructuring would help unlock the lender’s full potential, though analysts said it lacked savings details and heated debate about what changes he and Kaur might pursue next.
“It raises an obvious question about the future of the remaining businesses outside the UK and Hong Kong, particularly Mexico,” said Alex Potter, global financial analyst at abrdn.
While calls to break up the bank at major shareholder Ping An Insurance Group have died down, some investors are wondering what else management can do to boost its adjusted earnings.
HSBC shares have underperformed peers so far this year, up 7% compared with a 20% gain for the European benchmark, despite plans to buy back billions of dollars in shares and flat profit growth, raising questions about whether profit growth could emerge where.
THE GENDER GAP
Kaur joins a small but growing group of women in top global banking roles, including Citi CEO Jane Fraser, Morgan Stanley CFO Sharon Yeshaya and JP Morgan senior executives Mary Erdoes, Marianne Lake and Jennifer Piepszak.
Kaur, on her LinkedIn profile, describes herself as a “passionate supporter of diversity and inclusion” and is a global sponsor of HSBC’s Embrace employee network that helps attract, retain and engage with multicultural employees among the lender’s 225,000 employees worldwide.
Beyond the current challenges of the CFO role, Kaur is seen by some as a potential catalyst for increased momentum in the bank’s efforts to close the gender pay gap.
The gap at HSBC across its UK branches, at 43.2% in 2023, is not only the widest in banking but across the industry.
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