Is this an indicator of London’s importance (or lack thereof) in the new world order? HSBC announced today that chief exec Mike Geoghegan will be moving permanently to Hong Kong, so he can concentrate on the bank’s expansion in China. Its HQ will continue to be in London, but the day-to-day running of the business will now take place several thousand miles away - a fairly unusual corporate arrangement, but one that shows how much importance HSBC now attaches to the emerging markets of the East. And with the G20 currently meeting in the US to prepare their latest round of voter-friendly banker-bashing, we can think of another reason why Geoghegan might fancy getting out of the City...
To be fair to HSBC, the numbers speak for themselves. In the first half of the year, Hong Kong and China accounted for 40% of the bank’s entire pre-tax profits; soon, it'll probably be more like a half. The bank’s always had a strong focus on eastern emerging markets – it is the Hong Kong & Shanghai Banking Corporation, after all – but now they’re churning out such juicy profits, at a time when western markets are fairly stagnant, it’s not surprising that the region has shot right to the top of HSBC’s priority list. (Incidentally, Geoghegan’s also taking over strategy from media darling exec chairman Stephen Green – so if the latter isn’t running strategy or ops, why does he still have exec in his job title?)
The importance of China is also reflected in today’s announcement that the G20 will henceforth be the new caretakers of the global economy; this means emerging countries (particularly China and India) will be given a seat at the top table of economic policy-making, rather than the G7/ G8 club of rich (mostly Western) countries ruling the roost. They’re also likely to get a much more prominent role in the International Monetary Fund – in return for encouraging their citizens to start frittering away more of the money they’ve been prudently saving, to bail out Western exporters.
Encouragingly, they might well be flexing their new muscle to give the French a bloody nez: although the G20 have been making some vague noises about linking banker bonuses to long-term value creation (did it really take the world’s finest political minds to work that out?), it looks as if French calls for direct caps will go unheeded. Although time will tell on that front...
In today's bulletin:
HSBC boss Shanghaied out of London as G20 talks banker-bashing
John Lewis shines as buoyant Waitrose takes on the high street
Twitter may be hot, but is it really worth $1bn?
Are entrepreneurs born or made?
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