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HSBC moves its chief executive to Hong Kong
2009-09-25
LONDON (AFP) - HSBC on Friday said its chief executive Michael Geoghegan would move to Hong Kong from London to be closer to the banking group's "largest and most important region" of operation. HSBC, founded in Hong Kong and Shanghai in 1865, said it would remain headquartered in London and regulated by Britain, while Geoghegan's relocation would begin from February 1, 2010. "There is absolutely no question of HSBC pulling away from London. We will operate from two equally strategically important centres for the company," chairman Stephen Green said in a statement. "The additional management presence in Hong Kong and focus on our faster-growing markets is absolutely right for HSBC and entirely consistent with the strategy we set out in 2006," he added. HSBC, Europe's biggest bank, said Geoghegan would also become chairman of the group's Asia business. "Operating from Hong Kong, the hub for HSBC's Asia-Pacific business ... Geoghegan will be located in the group's strategically most important region, with a focus on ensuring its growth potential is fully realised," HSBC said. "HSBC Holdings Plc, the group holding company, remains domiciled in the UK and has no plans to move. It will continue to be resident in the UK for tax purposes." HSBC, reflecting its origins as the Hongkong and Shanghai Banking Corporation, added that the move "further positions the group for the shift in the world's centre of economic gravity from West to East." The outlook had been very different for HSBC 20 years ago. Viewing Europe then as vital to the group's future, HSBC Holdings plc was formed in 1991, with its shares quoted in London and Hong Kong. In recent years and prior to the current economic downturn, the bank switched attention back to Asia, notably by investing in China. "Operating from Hong Kong, I will be on the ground in our largest and most important region," Geoghegan said in Friday's statement. "The move we are announcing today mirrors the shape of our business, as well as reflecting our deep roots in Asia and Hong Kong." The switch comes as HSBC, like its peers, seeks to build up its capital reserves after suffering huge losses from the US housing crisis fallout. Last month, HSBC reported that its first-half net profits slumped by 57 percent to 3.35 billion dollars (2.35 billion euros) as bad debts ballooned to nearly 14 billion dollars. Impairment charges and other credit provisions soared by 39 percent to 13.9 billion dollars in the six months to June, compared with the figure in the same period of last year, HSBC had said in a results statement. HSBC, while escaping the need for a British government bailout, raised 12.5 billion pounds (18 billion dollars, 13.7 billion euros) earlier this year via a sale of new shares to bolster its finances.
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