U.S. News

Geoghegan Set to Quit HSBC by Year End

By Patrick Jenkins, Financial Times

Michael Geoghegan is poised to step down as chief executive of HSBC at the end of the year, according to two people close to the bank’s board, to be replaced by Stuart Gulliver, head of the group’s investment bank.

Michael Geoghegan, HSBC Group Chief Executive Officer
Mike Clarke | AFP | Getty Images

At the same time, Douglas Flint will take over as chairman from Stephen Green, who announced a fortnight ago that he would take up a government job as trade minister from January. The dramatic double changeover at the head of Britain’s biggest banking group follows a turbulent two weeks of jostling for position among board members, following Mr Green’s announcement.

The succession process, being led by senior independent director Sir Simon Robertson, has caused surprising rifts in the boardroom and has ended up with a completely different scenario from the one first envisaged. When Sir Simon began his succession planning several months ago, there were two main contenders for the chairman’s job – Mr Geoghegan himself, and former Goldman Sachs executive and HSBC non-executive John Thornton.

But the prospect of the top job being filled by Mr Thornton – a strong character who would be unlikely to play a low-key oversight role as chairman – appears to have rankled with Mr Geoghegan. Two people close to the board told the Financial Times earlier this week that Mr Geoghegan had threatened to resign if he was not made chairman and Mr Thornton secured the role instead – a report that the bank denied as “nonsense”.

One person close to the board said on Thursday that it was now 90 per cent certain Mr Flint and Mr Gulliver would be the new top team. Another said it was “a done deal”, that would be rubberstamped at board meetings taking place on Tuesday and Wednesday in Shanghai.

Although such a dramatic overhaul at the top of HSBC could concern investors, one senior City banker who knows HSBC well said: “Flint and Gulliver would be a spectacular combination. It would be the dream ticket.”

HSBC declined to comment.