Stephen Green Group chairman, HSBC
HSBC announced on Friday the relocation of group chief executive Michael Geoghegan from London to Hong Kong, signaling the bank's effort to enhance its presence in China and other Asian emerging markets.
"We see China in particular, and Asia in general, as the best sources of growth over the next decade or more for HSBC, because the world macro-economy is shifting from the West to the East," Group Chairman Stephen Green told China Daily in a telephonic interview on Friday.
"HSBC's own strong franchise and historical roots in this part of the world mean that we are particularly well placed to benefit from those macroeconomic developments," he said.
Hong Kong and the mainland accounted for about one-third of HSBC's profits in the first half of the year, according to Green, and he expected the proportion would continue to grow over time, as the Chinese economy could be the fastest-growing economy in the world.
Green said the move did not mean a change in strategy and was in line with the emerging market-focused strategy the bank set out in 2006. HSBC Holdings will remain domiciled and regulated in the UK for tax purposes and had no plans to move, it said.
Michael Geoghegan, 55, will also succeed Vincent Cheng to become the chairman of the Hongkong & Shanghai Banking Corp, the group's Asian unit, while Cheng will remain a member of the board of HSBC Holdings and chairman of HSBC China, mainly concentrating on the bank's business operation in the mainland and Taiwan.
"Operating from Hong Kong, I will be on the ground in our largest and most important region," Geoghegan, the group chief executive and the newly appointed Asia Pacific chairman, said in a statement.
Fu Lichun, banking analyst with Southwest Securities, said it was absolutely reasonable for foreign banks to look more to the East, as Asia, and China in particular, were bound to become the most lucrative markets in the near future.
"The move, together with its plan to get listed on the Chinese stock market, would significantly accelerate the localization process of the bank in China," he said.
Green clarified that this particular decision was driven by the business imperative and was in no way linked to the bank's listing plan on the Shanghai bourse. However, he still expressed HSBC's keen interest to get listed on the Chinese mainland.
Geoghegan's move has also triggered some other changes in HSBC's senior management team. Sandy Flockhart will be appointed chairman of personal and commercial banking and be based in Hong Kong, while Peter Wong will replace Flockhart to become chief executive of the Hongkong and Shanghai Banking Corporation Limited. These personnel changes will all come into effect from Feb 1, 2010.
