HSBC chief executive to step down in major shake-up: reports

24th September 2010, Comments 0 comments

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 Friday.

He will be replaced by Stuart Gulliver, head of the group's investment bank, the Financial Times and BBC reported.

Finance director Douglas Flint will take over as chairman from Stephen Green, who announced this month he was stepping down to become Britain's trade minister at the start of next year, the reports said.

An HSBC spokesman refused to comment on the reports, saying: "No decision has been made."

The changes cap a tumultuous period at the top of HSBC since Green announced he was quitting, with neither of the two men initially expected to become the next chairman ending up in the job.

Along with 56-year-old Geoghegan, the other frontrunner to become chairman was considered to be former Goldman Sachs banker John Thornton, a non-executive director at HSBC.

News of Hong Kong-based Geoghegan's departure came after the 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 Thornton.

The bank has dismissed the suggestion: "It is nonsense that (Geoghegan) threatened to resign unless he was appointed chairman."

HSBC has in the past promoted its chief executive to the chairman's role.

But choosing between Geoghegan and Thornton proved too difficult for the bank's board and Flint emerged as a compromise candidate, according to the FT.

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.

© 2010 AFP

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