HSBC CEO To Move To HK

http://online.wsj.com/article/BT-CO-20090925-705112.html

By Aries Poon and Chester Yung Of DOW JONES NEWSWIRES
HONG KONG (Dow Jones)--HSBC Holdings PLC (HBC) said Friday Group Chief Executive Michael Geoghegan will relocate to Hong Kong from London in February, as the U.K.-headquartered bank beefs up its presence in the Greater China region and emerging markets in general.

=> Yes, that is a good decision and a decision I've subspected long ago.

The bank, which was founded in Hong Kong in 1865 and moved its headquarters to London in 1992, is relocating its top executive at a time when Asia appears as the first region to emerge from the global financial downturn.

Apart from continuing his role as Group CEO, Geoghegan will replace Vincent Cheng as chairman of the bank's Asian unit, Hongkong & Shanghai Banking Corp., commonly known as Hongkong Bank, also from February.

"The fast-growing markets, particularly of Asia, are changing the pattern of the world economy," HSBC Chairman Stephen Green told reporters in a news briefing.

"Nothing that's happened in the financial crisis...of the last two years changes our view that this trend is going to continue."

Green said emerging markets, which includes Asia, Latin America and the Middle-East, accounted for around 60% of the bank's profits in the first half.

At the press conference, Geoghegan reiterated the ambitions by the bank - Europe's biggest by market value - to expand further in China, one of the bank's fastest growing and strategically important markets.

"We want to be at the gateway to China. Being in China itself is a logical goal and the place to work on it is Hong Kong," said Geoghegan at the news conference. "You must expect Asian businesses to grow, and logically we are going to be here."

Cheng, currently Hongkong Bank's chairman, will remain an executive director and will continue to help the bank develop its businesses in China, Hong Kong and Taiwan, HSBC said.
Cheng said his reassignment was part of the bank's overall plan to focus more on emerging markets, and not due to his health or personal reasons. Cheng, 61, was named chairman of Hongkong Bank in 2005.

=> I like Cheng, too bad if he need to reassign and being replaced :( He has wisdom & vision, at the same time very conservative in banking (only lend $ to credit worthy individual & crop). This is the kind of style I think a banker should have.

He said he has always taken a keen interest in China. "Now I can spend more time and focus on China."

Meanwhile, Peter Wong, currently an executive director of Hongkong Bank, will replace Sandy Flockhart as chief executive. Flockhart will be appointed chairman of personal and commercial banking globally and will remain based in Hong Kong.

Return To Roots
The return of the group chief executive's position to Hong Kong comes 17 years after the bank relocated its headquarters to London from Hong Kong after it acquired all of the U.K.'s Midland Bank PLC.

Many analysts saw the bank's move to London in 1992 as politically motivated amid uncertainties ahead of Hong Kong's handover to Chinese rule in 1997. HSBC was set up in colonial Hong Kong to finance trade between Europe, India and China.

One of Hong Kong's oldest "hongs," or diversified trading groups, Jardine Matheson Holdings, also made moves out of Hong Kong ahead of the handover, and transferred its primary stock market listing to London.

HSBC Holdings will remain domiciled in the U.K. "for tax purposes" and has no plans to move, the bank said. Green, the bank's chairman, will remain based in London.

=> oh no, that's not good, because tax in U.K. is much higher than in H.K.

But China's rapid economic growth has proved attractive for companies like HSBC, which saw its market as being too important to ignore, and has been expanding its presence there in recent years.

The lending giant is planning an initial public offering in Shanghai that will help raise the company's profile in mainland China. The bank said last month it hired advisers to handle the IPO plan but didn't name the banks or specify the offering's time frame.

HSBC has an 18.6% stake in Bank of Communications Co., China's fifth-largest lender by assets; a 16.7% stake in Ping An Insurance (Group) Co. of China Ltd.; an 8% stake in Bank of Shanghai Co.; and a 49% stake in HSBC Jintrust Co, a Shanghai-based fund company.

HSBC has in recent years made attempts to expand in developed markets, but with mixed success. It purchased mortgage lender House International Inc. in the U.S. in 2003, but earlier this year decided to pull out of the consumer lending market in the country amid sharp losses, and added it may review its U.S. credit card business.

Its business in Europe has also been affected by the credit crunch. In the first half, pretax profit for HSBC's European operations fell 42% to US$2.98 billion from US$5.18 billion a year earlier.
By contrast, HSBC's Hong Kong first-half pretax profit fell just 19%, while pretax profit for the rest of Asia declined 23% from a year earlier.

-By Aries Poon and Chester Yung, Dow Jones Newswires; 852-2832-2332; aries.poon@dowjones.com