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 yesterday.
He will be replaced by Stuart Gulliver, head of the group’s investment bank, the Financial Times (FT) and BBC reported.
Finance director Douglas Flint will take over as chairman from Stephen Green, who announced this month he was leaving to become the British minister of state for trade and investment at the start of next year, the reports said.
An HSBC spokesman said that “no decision has been made.”
However, a person close to the bank’s board told the newspaper the decisions were now 90 percent certain and another was cited as saying it was a “done deal.”
The succession will reportedly be finalized 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.
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.”
A Hong Kong-based bank spokesman declined to comment further.
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, the paper said.
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.
The post of HSBC chairman became available when Green was appointed Britain’s trade minister on Sept. 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.
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