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Business

Head of HSBC to be replaced by the end of the year

Text by News Wires

Latest update : 2010-09-24

British bank HSBC will replace its CEO Michael Geoghegan at the end of the year, according to British media, in a major shake-up of management at the bank, one of the biggest in the world.

AFP - HSBC chief executive Michael Geoghegan is to step down at the end of the year as part of a major shake-up of the bank's top management, reports said Friday.
  
He will be replaced by Stuart Gulliver, head of the group's investment bank, the Financial Times and BBC reported.
  
Finance director Douglas Flint will take over as chairman from Stephen Green, who announced this month he was stepping down to become Britain's trade minister at the start of next year, the reports said.
  
An HSBC spokesman said: "No decision has been made." But a person close to the bank's board told the FT the decisions were now 90 percent certain and another was cited as saying it was a "done deal."
  
The succession will reportedly be finalised at a board meeting in Shanghai next week. The bank's main regulator, Britain's Financial Services Authority, still has to approve the appointments, according to the FT.
  
The dramatic overhaul at the top of HSBC caps a tumultuous period for the bank since Green announced he was quitting, with neither of the two men widely expected to become the next chairman ending up in the job.
  
Hong Kong-based Geoghegan, 56, was regarded as a frontrunner and HSBC has a history of elevating its chief executive to chairman.
  
The FT reported this week that he had threatened to quit when the bank's board indicated it might pass him over and instead hand the chairman's job to HSBC non-executive director John Thornton.
  
The bank has dismissed the suggestion: "It is nonsense that (Geoghegan) threatened to resign unless he was appointed chairman."
  
Thornton, a former Goldman Sachs banker, was the other main contender for the job but choosing between him and Geoghegan proved too difficult for the bank's board, according to the FT.
  
Flint emerged as a compromise candidate, said the paper.
  
The promotion of Gulliver would be the second time in a month that a highly-paid investment banker has been elevated to chief executive of a major bank, following Bob Diamond's appointment at Barclays.
  
Diamond's appointment proved hugely controversial in Britain, where the US national is infamous for pocketing massive bonuses.
  
He was described earlier this year by then business minister Peter Mandelson as "the unacceptable face of banking" amid public outrage at bankers' bonuses.
  
The post of HSBC chairman became available when Green was appointed Britain's trade minister on September 7.
  
Green, who spent 28 years at Asia-focused HSBC, is leaving the bank in rude health after steering it through the global financial crisis without taking a government bailout.
  
HSBC, founded in Hong Kong and Shanghai in 1865, sees Asia as its most important region although it remains headquartered in London.
  
The HSBC shake-up is the just the latest to rock the world of banking.
  
In the past few weeks, John Varley has said he is retiring as chief executive of Barclays and Eric Daniels has announced his retirement from the same role at Lloyds.
  
Alessandro Profumo stepped down from his role as chief executive of Italy's Unicredit on Tuesday after a clash with shareholders.

Date created : 2010-09-24

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