HSBC (HBC) is the largest bank in Europe, by most measures. Its CEO will be relocating to Hong Kong from London early next year, an indication of the rise of Asia and the fall of Europe as financial centers.
HSBC said it will “transfer its Group Chief Executive Michael Geoghegan to Hong Kong from London from Feb. 1, 2010 as the bank seeks to emphasize growth potential in the Asian region.”
The news must be a stunning blow to the banking community in London which has viewed itself, along with New York City, as the financial capital of the world. The global credit crisis has obviously changed that. The recession has badly crippled the economies of the UK and EU. China, however, is still posting GDP growth of nearly 8%. Lending, money management, and underwriting are going to be tremendous businesses in the Asia region for the next several years. HSBC obviously believes that, for its shareholders, the Far East is where the money is to be made.
The news begs the question of the extent to which the largest US banks and brokerages will shore up their presences in the region. No American financial firm of any size has a CEO or president based outside the US. The precedent set by HSBC may change that.
The sun never set on the British Empire, at one point. That period is long over and it seems that the capital of the UK will soon be in Hong Kong or Shanghai.
Rule, Britannia!, indeed.
Douglas A. McIntyre
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