HSBC sticks to the inside track


HSBC Holdings, Midland Bank's parent company, yesterday announced a management reshuffle in London and Hong Kong, following the retirement of John Gray, Hongkong Bank's chairman.

Mr Gray, a 40-year stalwart of Hongkong Bank, will retire next year and be replaced by John Strickland, 55, who is currently based in London.

The appointment has surprised some observers, but the bank has displayed its traditional preference for promotions from within rather than injecting new blood into the management team.

There had been speculation that Mr Gray would be succeeded by Paul Selway- Smith, 50, who is at present executive director (Hong Kong and China) and the highest-profile official within the Hong Kong organisation.

Under the reorganisation, however, Mr Selway-Smith will move to London to run the group's merchant banking operations as chairman of HSBC Investment Bank Asia and Samuel Montagu. Bank officials stress that his move to London is for personal reasons.

These changes in the group's management will again focus attention on the future of Sir William Purves, 63, chairman of HSBC Holdings. He does not have to retire until he is 70 - but traditionally Hongkong Bank executives have been replaced by the age of 65.

The clear heir apparent is John Bond, chief executive of the holding company - but Sir William, a cagey man who gives little away, has given no indication of his departure plans.

Although HSBC is now an international operation, incorporating Midland in Britain and Marine Midland in the United States, it is still run in the style of Hongkong Bank and primarily relies on Hong Kong stalwarts to provide the leadership of the holding company.

There are no more than a handful of high-level executives from Midland in HSBC Holdings, and although the bank insists that management integration between

Midland and its parent is growing, this was not reflected in yesterday's senior appointments, which all involve Hongkong Bank veterans.

John Strickland, the new Hongkong Bank chairman, only stands out from the crowd in coming from a systems background, rather than mainstream bank management.

He also broke the customary practice of lifetime employment with the bank by leaving for two years in 1969.

John Bond, chief executive of HSBC Holdings, described the appointments as providing "the team that leads us into the next century".