LONDON, Sept 27 — HSBC is to move its chief executive to Hong Kong from London as the “centre of economic gravity” shifts from West to East, the banking giant said.
HSBC, founded in Hong Kong and Shanghai in 1865, will remain headquartered in London and regulated by Britain, but chief executive Michael Geoghegan will relocate in February to be nearer to the group's 'largest and most important region' of operation.
“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 are absolutely right for HSBC and entirely consistent with the strategy we set out in 2006.”
HSBC, Europe's biggest bank, added that Geoghegan will also become chairman of the group's Asia business. He will be located in the group's strategically most important region, with a focus on ensuring its growth potential is fully realised, HSBC said.
Hong Kong welcomed the news, in a statement by its Chief Executive Donald Tsang.
HSBC wants to be one of the first overseas companies to list its shares in Shanghai, and at a press conference in Hong Kong, Green said the bank remained in talks with the authorities there to do so. He declined to say when it was likely to happen.
The bank will look to raise between US$3 billion (RM10.42 billion) and US$7 billion as part of a Shanghai listing, probably next year, people familiar with the matter told Reuters.
“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, an analyst for MF Global in London.
Geoghegan said: “We are expanding our branches throughout China. We are expecting to have around 100 (branches) by the end of this year. That will make us significantly the largest foreign player in the mainland Chinese market.”
Green said: “Nothing that's happened in the financial crisis, and the difficulties over the last two years, changes our view that that trend is going to continue. Indeed, if anything, it's accelerated by the crisis.”
The outlook had been very different for HSBC 20 years ago. Viewing Europe then as vital to the group's future, HSBC Holdings 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.
Last month, HSBC reported that its first-half net profit slumped by 57 per cent to US$3.35 billion as bad debts ballooned to nearly US$14 billion. — Straits Times
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