Is Winters next in line for great HSBC reshuffle?
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Is Winters next in line for great HSBC reshuffle?

News that Michael Geoghegan is to step down as chief executive of HSBC will shock many in the markets. Flint to chairman; Gulliver to CEO; but gap needs to be filled at top of global banking and markets business

News that Michael Geoghegan is to step down as chief executive of HSBC will shock many in the markets.

Following on from chairman Stephen Green’s impending move to the UK coalition government as trade minister, Geoghegan’s shock departure marks a tumultuous couple of weeks for HSBC.

Douglas Flint is to take over as chairman, a choice first mooted by Euromoney two weeks ago:

“There’s one obvious internal candidate [for chairman] – CFO Douglas Flint. The Scot was in the running to become chief executive four years ago. Flint earned immense respect for his management of HSBC’s finances through the crisis. Shareholders know, like and respect him. So do regulators, a key part of the chairman’s role.”

Global banking and markets chief Stuart Gulliver will become chief executive – a move that was expected to happen in the medium term, but may have taken even Gulliver by surprise by coming now.

The reasons behind Geoghegan’s departure will become clear soon enough. The new team of Flint and Gulliver is likely to be welcomed by many in the markets.

But the pace of change leaves HSBC with other big holes to fill. Most notable among them is who will replace Gulliver as head of the global banking and markets business.

While Gulliver took on extra responsibilities as chairman of Europe and the Middle East and wealth management earlier this year, as Geoghegan relocated to Hong Kong for his short-lived Asia-based tenure, he maintained direct responsibility for the GBM business that in large part he created – and which for the past few years has generated much of HSBC’s profits, totalling £20 billion over the past three years.

Gulliver has many trusted lieutenants – notably Samir Assaf, head of markets, and Robin Phillips, head of banking.

But it remained very much Gulliver’s business. Now he must oversee HSBC’s huge global network, and GBM will need a new leader.

There’s no obvious internal candidate. But there is one banker in the wings who would fit the bill perfectly.

Bill Winters has not been in full-time employment since his departure from JPMorgan, where he was co-head of investment banking, around a year ago. He is one of few investment bank chiefs to enhance his reputation during the global financial crisis, before losing favour with JPMorgan CEO Jamie Dimon -- perhaps because his reputation had grown too much.

Winters has been understandably linked with a host of senior banking roles ever since. Many of them have been in the US, but Winters is known to want to remain in London, which has been his home for many years. Bankers who know both Winters and Gulliver well say the two have a great deal of respect for, and would work well with, each other.

Winters is one of the great markets bankers of his generation. His credit and derivatives skills would be a great fit for HSBC’s treasury-focused GBM business. Winters’ lack of M&A experience would not be a hindrance, as HSBC is a marginal player in the M&A advisory business.

It could be that the turmoil of the past two weeks gives HSBC a stronger management team than ever before: Flint, the hugely respected chairman who commands strong relationships with investors and regulators; Gulliver, the man who built the GBM business and is the biggest advocate of HSBC’s focus on the emerging markets; and Winters, the man that every investment bank would like to hire.

see also:

Geoghegan: HSBC chief's final exclusive interviewEuromoney January 2011

Good leaders say you should only consider your legacy when you have left your business. Geoghegan is certainly keen to secure his, for the career that he had rather than the circumstances of his departure.

Is Flint the man for HSBC?

September 7, 2010

HSBC’s next chairman will tell you everything you need to know about the bank’s future.

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