HONG KONG—London Metal Exchange Chief Executive Matthew Chamberlain will remain in his position, a surprise reversal after he announced exit plans earlier this year.

Mr. Chamberlain, a former investment banker who has run LME since 2017, had said in January that he would depart at the end of April to run a cryptocurrency startup. That was before Russia’s invasion of Ukraine in late February upended the global metals markets and caused a nickel-trading fiasco at the LME.

The LME, a unit of Hong Kong Exchanges & Clearing Ltd. , suspended trading of nickel contracts for more than a week in March, after a surge in prices saddled some market participants—including a Chinese nickel giant—with heavy losses.

It was the first time the LME froze trading for a metal since the collapse of an international tin cartel in 1985, and the 145-year-old exchange came under criticism from traders for the way it handled the crisis.

“Events of recent weeks have brought into focus the importance of the LME and the metals markets,” Mr. Chamberlain said Wednesday. He said he wants to support “the long-term health and efficiency of the market” as he remains in his post.

Nicolas Aguzin, chief executive of HKEX, said he was pleased with Mr. Chamberlain’s decision to stay with the company after “his handling of the unprecedented developments in the nickel market.”

On a conference call Wednesday, Mr. Aguzin said Mr. Chamberlain has the full support of LME’s board. He added that nickel-trading reviews are still being conducted by the exchange, as well as U.K. financial regulators.

The U.K.’s Financial Conduct Authority earlier this month said it will examine how LME handled the March 8 trading suspension, which lasted for six sessions. The Bank of England is examining the operation of the LME’s clearinghouse during that period. Both regulators are also reviewing the exchange’s governance, market oversight and risk management.

Mr. Chamberlain joined the LME in 2012, the same year that HKEX beat out international rivals to acquire the London-based member-owned exchange. He had previously worked at UBS Group AG , Perella Weinberg Partners and Citigroup Inc.,

and oversaw LME’s strategy and business development before becoming CEO at the age of 35.

After Mr. Chamberlain indicated he planned to step down, HKEX named Adrian Farnham, the chief executive of LME’s clearing and settlement business, as interim LME CEO from May 1.

On Wednesday, HKEX said Mr. Farnham will be retiring in July after a long career in the financial markets, including nine years with the LME. Catherine Lester, LME Group’s chief financial officer, is also leaving the company to pursue other interests and will be succeeded by acting CFO Tabitha Silverwood.

HKEX on Wednesday also reported a 30% decline in profit to the equivalent of $339.4 million for the first three months of the year, a period that saw market turbulence weighing on share-issuance volumes.

First-quarter revenue fell 16% from a record high in the same period last year, to the equivalent of $586.1 million, due to lower trading and clearing fees, as well as lower depository fees.

“We were not immune to global market sentiment which resulted in some softness in the IPO market, reduced valuations in our investment portfolio and pricing volatility in our commodities market,” Mr. Aguzin said in a statement.

HKEX noted that more than 150 companies had active listing applications at the end of March, signaling that many companies are eager to raise funds and go public when market conditions are more favorable.

Write to Dave Sebastian at dave.sebastian@wsj.com