HSBC Chairman Steps Down to Become U.K. Trade Minister
The bank plans to name Green’s replacement by the end of this year, London-based HSBC said in a statement today. Green will take up his government job in January.
The lender “had already been working on the chairman’s succession” and had appointed external advisers, HSBC said in the statement. “It was always the board’s intention that it would be in a position to approve a successor to Green before the end of the year, and that timetable remains on schedule.”
Green, 61, is leaving Europe’s biggest bank as a U.K. government commission considers whether lenders should separate their consumer and investment banking divisions. Barclays Plc, Britain’s third-largest bank, today said Bob Diamond, head of its investment banking arm, will replace John Varley as CEO next year.
HSBC “will be looking to balance out the board between having a British CEO and non-British chairman or vice versa,” said Colin Mclean, who manages 650 million pounds ($999 million) at SVM Asset Management in Edinburgh, including HSBC shares. CEO Michael Geoghegan, who is British, and former Goldman Sachs partner John Thornton are “viable” candidates to succeed Green, Mclean said. Thornton, who’s based in New York, couldn’t immediately be reached.
‘Business as Usual’
Geoghegan, who replaced Green as CEO in 2006, issued a statement lauding his predecessor’s contribution to the bank. “For HSBC it is business as usual; I continue to run the company,” he said.
HSBC was little changed at 662.4 pence in London for a market value of 116.6 billion pounds.
Thornton joined HSBC as a non-executive chairman of its North American unit in December 2008, six months after the division pushed the bank into the biggest writedowns in its history. The bank has since set aside more than $58 billion to cover bad loans made by its subprime lender Household International, which it purchased in 2003.
Thornton, a former Goldman Sachs banker and chairman of its Asia unit from 1996 to 1998, was elected in May to run HSBC’s remuneration committee.
Geoghegan has more than 35 years’ experience with HSBC in roles all over the world and ran its South American unit from 1997 to 2003. He moved to Hong Kong from London in February this year and gained control of strategy from Green, as the bank focuses on emerging markets.
Green, who joined HSBC is 1982, was CEO from 2003 until 2006 when he succeeded John Bond as chairman. Green received a salary of 1.25 million pounds as chairman and didn’t receive a bonus.
The trade minister helps promote British companies overseas, something Cameron said in July he wants to be the focus of U.K. foreign policy. In 2007, Gordon Brown appointed former business lobbyist Digby Jones to the role. He left in 2008. In 2009, Mervyn Davies, former chairman of Standard Chartered Plc, took up the job.