Going back to its roots, HSBC moves CEO to Hong Kong
But the 144-year-old bank will remain based in UK for tax purposes
Reuters, Bloomberg 26 September 2009
HSBC Holdings is swinging its power base back to its place of birth 144 years ago by moving its chief executive to Hong Kong as it increasingly focuses on Asia.
HSBC, Europe’s biggest bank, said yesterday it will stay based in London for tax purposes and had no plans to move, and Britain’s Financial Services Authority will remain its lead regulator.
But CEO Michael Geoghegan will move to Hong Kong from February.
‘It’s about building this business in Asia. We know the business is coming our way and we intend to be here to take it,’ Mr. Geoghegan told reporters on a conference call. ‘West is coming East and we want to be at the gate into China and be in China itself, and the most logical place to work on that strategy is Hong Kong,’ he added.
He told reporters in Hong Kong it will allow the bank ‘to be faster on our feet’ in the region.
HSBC wants to be one of the first overseas companies to list its shares in Shanghai, and chairman Stephen Green said it remains in talks with the authorities there to do so. He declined to say when it is likely to happen.
The bank will look to raise between US$3 billion and US$7 billion as part of a Shanghai listing, probably next year, people familiar with the matter said.
‘It’s significant in the medium term. It shows very much that being close to China and the Chinese government is the most important thing to HSBC going forward,’ said Simon Maughan, analyst for MF Global in London. ‘It’s about where the growth is coming from.’
The prize could include a leading role in trade finance and other business if China’s currency and debt markets open up.
HSBC, unlike UK rivals Lloyds Banking Group plc and Royal Bank of Scotland Group plc, has avoided a government bailout even after posting US$67 billion of provisions for bad loans in the past 31/2 years. The bank is expanding in emerging markets and has closed consumer finance operations in the United States, which contributed the most to losses.
The bank got about 26 per cent of net revenue from Hong Kong and the Asia-Pacific region last year, according to HSBC’s financial reports. HSBC’s business is focused on Hong Kong, which accounted for 15.3 per cent of the group’s assets, while the rest of Asia accounted for 9.9 per cent.
It was formed as the Hongkong and Shanghai Banking Corporation in Hong Kong in 1865 to finance the growing trade between China and Europe, and it opened a branch in Shanghai in April the same year.
It moved to London in 1993 as a condition of the previous year’s takeover of Midland Bank, in a move seen as a major blow to Hong Kong. But the bank is revered in Hong Kong, where it is known as ‘big elephant’ and is one of three note-issuing banks there and 30 per cent of its shareholders are based there, compared to 45 per cent in Britain.
‘The bank grew up in this town. This feels so absolutely right to all of us,’ Mr. Green said at a press conference in Hong Kong. ‘You asked about the health of the lions. I think they’re in very robust health.’
He was referring to two bronze lion statues - named Stephen and Stitt after early general managers in Hong Kong and Shanghai - sitting astride the Hong Kong entrance.
HSBC, which operates in 86 countries, has investments worth about US$22 billion in China, including a 19 per cent stake in Bank of Communications and a 16.8 per cent stake in Ping An Insurance.
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Going back to its roots, HSBC moves CEO to Hong Kong
But the 144-year-old bank will remain based in UK for tax purposes
Reuters, Bloomberg
26 September 2009
HSBC Holdings is swinging its power base back to its place of birth 144 years ago by moving its chief executive to Hong Kong as it increasingly focuses on Asia.
HSBC, Europe’s biggest bank, said yesterday it will stay based in London for tax purposes and had no plans to move, and Britain’s Financial Services Authority will remain its lead regulator.
But CEO Michael Geoghegan will move to Hong Kong from February.
‘It’s about building this business in Asia. We know the business is coming our way and we intend to be here to take it,’ Mr. Geoghegan told reporters on a conference call. ‘West is coming East and we want to be at the gate into China and be in China itself, and the most logical place to work on that strategy is Hong Kong,’ he added.
He told reporters in Hong Kong it will allow the bank ‘to be faster on our feet’ in the region.
HSBC wants to be one of the first overseas companies to list its shares in Shanghai, and chairman Stephen Green said it remains in talks with the authorities there to do so. He declined to say when it is likely to happen.
The bank will look to raise between US$3 billion and US$7 billion as part of a Shanghai listing, probably next year, people familiar with the matter said.
‘It’s significant in the medium term. It shows very much that being close to China and the Chinese government is the most important thing to HSBC going forward,’ said Simon Maughan, analyst for MF Global in London. ‘It’s about where the growth is coming from.’
The prize could include a leading role in trade finance and other business if China’s currency and debt markets open up.
HSBC, unlike UK rivals Lloyds Banking Group plc and Royal Bank of Scotland Group plc, has avoided a government bailout even after posting US$67 billion of provisions for bad loans in the past 31/2 years. The bank is expanding in emerging markets and has closed consumer finance operations in the United States, which contributed the most to losses.
The bank got about 26 per cent of net revenue from Hong Kong and the Asia-Pacific region last year, according to HSBC’s financial reports. HSBC’s business is focused on Hong Kong, which accounted for 15.3 per cent of the group’s assets, while the rest of Asia accounted for 9.9 per cent.
It was formed as the Hongkong and Shanghai Banking Corporation in Hong Kong in 1865 to finance the growing trade between China and Europe, and it opened a branch in Shanghai in April the same year.
It moved to London in 1993 as a condition of the previous year’s takeover of Midland Bank, in a move seen as a major blow to Hong Kong. But the bank is revered in Hong Kong, where it is known as ‘big elephant’ and is one of three note-issuing banks there and 30 per cent of its shareholders are based there, compared to 45 per cent in Britain.
‘The bank grew up in this town. This feels so absolutely right to all of us,’ Mr. Green said at a press conference in Hong Kong. ‘You asked about the health of the lions. I think they’re in very robust health.’
He was referring to two bronze lion statues - named Stephen and Stitt after early general managers in Hong Kong and Shanghai - sitting astride the Hong Kong entrance.
HSBC, which operates in 86 countries, has investments worth about US$22 billion in China, including a 19 per cent stake in Bank of Communications and a 16.8 per cent stake in Ping An Insurance.
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