AAGIY AIA Group Ltd (PK)

Hard-charging Mark Tucker stands to shake up the British lender as its chairman

By Julie Steinberg in Hong Kong and Margot Patrick in London 

Mark Tucker, the first outsider tapped as chairman of HSBC Holdings PLC, is a savvy businessman with intimate knowledge of the U.K. and Asian markets where the bank principally operates.

But people who know the hard-driving Mr. Tucker say one of his biggest effects on the 152-year-old British lender could be a shake-up of what some describe as a bureaucratic, clubby culture.

Mr. Tucker, 59, ran Hong Kong-based insurer AIA Group Ltd. for seven years, taking it from a unit of American International Group Inc. to the second-largest life insurance company in the world by market capitalization. He has been described by people who work with him as demanding and direct -- someone who keeps staffers constantly on their toes.

Associates say he emails at all hours, responds to others quickly and keeps track of who delivers on commitments -- and who doesn't.

Those qualities could stir things up at HSBC, which critics say has resembled the civil service, filled with employees who feel they are guaranteed jobs for life. HSBC also has admitted to having too many layers of management.

"He doesn't suffer fools, that is for sure," said one Asia-based business associate of Mr. Tucker, who asked not to be named because he wasn't authorized to speak on the record. "You have to pass a bit of a sniff test before he'll give you the time you need."

Mr. Tucker declined to comment for this article. A spokeswoman for HSBC declined to comment.

The hiring of Mr. Tucker is a big departure for HSBC, which for decades promoted its chief executive into the chairman role, usually at the end of a lifetime career at the bank.

At HSBC, one of Mr. Tucker's most important tasks will be appointing a new chief executive to replace current CEO Stuart Gulliver, who expects to step down in 2018. Some candidates are HSBC's global retail banking head John Flint, who has been at the bank since 1989, and HSBC Bank PLC CEO Antonio Simoes, who joined in 2007.

But external candidates will also have a strong shot and could be the preference of the bank's investors. One successful recent outside hire has been former Goldman Sachs banker Matthew Westerman, who a year ago was brought on as co-head of global banking. Mr. Westerman restructured the group, clearing out a cadre of senior managers and raising internal performance standards.

Established in 1865, HSBC was formed to finance trade after the Hong Kong and Shanghai ports opened up in the wake of the First Opium War. HSBC long functioned as Hong Kong's de facto central bank. When the territory was under British control, HSBC's chairman often held Hong Kong political appointments as well.

By 2009, the bank was in 88 countries and creaking under an outdated structure in which dozens of country heads reported directly to the CEO. It had to adapt to higher capital requirements and spent billions of dollars improving its systems after U.S. authorities said its money-laundering checks had failed.

Recently, HSBC has pared businesses and exited countries but it is still far from meeting a return on equity target of more than 10%, and reported worse than expected fourth-quarter results. There are also question marks around its plan to invest more in China retail banking and a domestic securities business, which analysts say could take a decade or more to pay off.

"Bringing an outsider's view and an innate sense of urgency will be immensely helpful" to turning around HSBC, said Jonathan Larsen, a former senior Citigroup executive who worked closely with Mr. Tucker on an insurance distribution deal.

A former professional soccer player in the U.K., Mr. Tucker expanded Prudential PLC's business across Asia in the 1990s, and worked as the finance director at British lender HBOS PLC while it was on a lending binge in the mid-2000s.

Mr. Tucker joined AIA in 2010 when AIG was readying it for a listing in Hong Kong. Under his leadership, the insurer's share price has more than doubled and its new-business value, a key measure of insurers' profitability, has quadrupled to $2.75 billion in 2016. The company has expanded into new markets and built its business in China even as economic growth there slowed.

Mr. Tucker has served as a board member of Goldman Sachs Group Inc. since 2012, a role he will give up. Between 2009 and 2012, he was a nonexecutive director at the Bank of England.

Mr. Tucker is hands-on when it comes to striking deals, say people familiar with his management style, sending emails with detailed questions about agreements and negotiations that in other deals are often sent by bankers. He pulled the plug on bids for Dah Sing Financial Holdings Ltd.'s life-insurance businesses and Ageas NV's Hong Kong life insurance business while at AIA, according to people familiar with the matter, balking at the high offers put forth by others.

Write to Julie Steinberg at julie.steinberg@wsj.com and Margot Patrick at margot.patrick@wsj.com

Corrections & Amplifications Mark Tucker led AIA Group Ltd. as it became the second-largest life insurance company in the world by market capitalization. An earlier version of this article incorrectly stated it had become the second-largest insurance company by market capitalization.

(END) Dow Jones Newswires

March 14, 2017 02:47 ET (06:47 GMT)

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