HSBC breaks with tradition, names AIA boss Tucker as chairman

Sumeet Chatterjee and Lawrence White

* AIA Group boss Mark Tucker named HSBC chairman

* Tucker will take over as group chairman Sept. 1

* AIA says Ng Keng Hooi to succeed Tucker

* Tucker to identify successor to Chief Executive Gulliver

(Adds analyst comment, share price, details on remuneration)

HONG KONG/LONDON, March 13 (Reuters) - HSBC Holdings Plc

, Europe's biggest bank, tapped an outsider for its top

job on Monday, appointing insurance veteran and AIA

Group boss Mark Tucker as chairman to replace Douglas Flint, who

plans to step down in 2017.

A one-time professional footballer who has held several

leadership jobs including running Britain's Prudential,

Tucker will take over as group chairman designate from Sept. 1

and as non-executive group chairman on Oct. 1.

The bank's shares rose 1.2 percent in Hong Kong on Monday on

news of the appointment, which market-watchers said signalled

the bank's ongoing pivot towards Asia and steadier, lower-risk

income streams.

"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," said Benjamin Quinlan, CEO of Hong Kong consultancy

Quinlan & Associates.

"It also highlights a renewed focus on risk and compliance

after HSBC recently got itself in hot water with regulators. The

strategy now is all about stability and predictability."

Among the first tasks for Tucker - whose appointment breaks

with HSBC's usual practice of appointing insiders for its top

jobs - will be to identify a successor to HSBC Chief Executive

Stuart Gulliver, a process expected to conclude in 2018.

Flint and Gulliver's departure from HSBC after six years

will end one of the longest-serving management partnerships at a

major global bank.

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 lenders from low global interest rates

which have made it difficult to invest deposits profitably.

HSBC's full-year profit slumped 62 percent and fell far

short of forecasts last month as the bank took hefty writedowns

from restructuring efforts and flagged near-term brakes on

revenue growth.


In choosing the next chief executive, Tucker will first have

to decide whether to promote one of the lender's existing senior

executives or select an outsider like himself.

For his efforts, Tucker will receive an annual fee of 1.5

million pounds ($1.83 million) in addition to standard benefits,

HSBC said.

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.

Leading internal candidates for the CEO role include HSBC's

Europe chief Antonio Simoes and retail and wealth management

head John Flint, while former Goldman Sachs banker Matthew

Westerman is seen by some internally as a candidate despite

overseeing a relatively small part of the investment bank.

Among external candidates, Lloyds Banking Group

Chief Executive Antonio Horta-Osorio is the name most frequently

cited by investors.

An exodus of senior talent from the industry in the wake of

the global financial crisis had made it "extremely challenging"

to find very senior executives, Quinlan said.

The new CEO's main challenge will be to restore revenue

growth at HSBC. The bank's return on equity, a key measure of

performance, 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.

Other obstacles to boosting HSBC's profits 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 the lender's global peers.

HSBC also faces slowing economic growth in China, dampening

hopes that an Asia pivot strategy announced last year could

boost returns for the bank.

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.

In a separate statement, AIA said Ng Keng Hooi,

its regional chief executive, will succeed Tucker from Sept. 1.

Tucker is also stepping down from the board of Goldman


($1 = 0.8219 pounds)

(Reporting by Sumeet Chatterjee and Lawrence White in Hong

Kong, and Anusha Ravindranath in Bengaluru; Additional reporting

by Michelle Price in Hong Kong; Editing by Stephen Coates)