HSBC's Studzinski quits for Blackstone

John Studzinski, the joint head of HSBC's investment bank, is quitting to join the American private-equity group Blackstone in the autumn.

Yesterday his co-head of the division, Stuart Gulliver, assumed sole control and took part of HSBC's asset management businesses under his wing.

Speculation that "Studs" would depart has been rife within banking circles since February when a reshuffle at HSBC saw him take on a more ambassadorial role.

The former Morgan Stanley rainmaker, charged by the outgoing HSBC chairman Sir John Bond three years ago with building him a full-service investment bank from scratch, was paid more than £8m last year. That took his earnings over the past three years to more than £25m. Within HSBC, only Mr Gulliver took home more.

Mr Studzinski is leaving to join Blackstone's executive committee and he will divide his time between London and New York. He said: "This is a big and exciting change I have thought about a lot.

"The opportunity to work in the very different environment of a smaller, private partnership, which at the same time offers all the challenges of a hugely successful business, was something that I found irresistibly attractive."

An American who has lived in Britain for more than two decades, Mr Studzinski's life outside the office often commands as many column inches in newspapers as his deal-making. The philanthropist and devout Roman Catholic gives away £1m a year to struggling artists. Away from his office in London's Canary Wharf, he can be found regularly ministering to the poor in soup kitchens and homeless shelters.

In March, Mr Studzinski staged the biggest firework display Austria had seen as part of a lavish, £140,000 party to mark his 50th birthday. A staff of 200 was brought in from Britain to oversee the event. Guests included Lord Browne of Madingley, the chief executive of BP, John F Kennedy's daughter, Caroline Kennedy, and the author Ken Follett.

Since HSBC launched its latest bid to take on Goldman Sachs, Citigroup and the other big investment banks in 2002, performance of the division has been patchy.

In the first half of last year, earnings fell 18 per cent while costs jumped 24 per cent. However, across the whole of 2005 investment banking contributed one-quarter of group profits.

HSBC has landed several lucrative advisory mandates in recent months, including Lakshmi Mittal's £12.3bn hostile bid for the rival steel maker Arcelor. Three months ago, a shake-up at the top of the investment bank saw responsibility for debt and stock underwriting pass from Mr Studzinski to Mr Gulliver.

News of his departure prompted long-standing questions to re-emerge about HSBC's commitment to investment banking, with its volatile earnings and culture of star bankers. HSBC continues to insist there will be no change to its five-year strategy.

Mr Studzinski will continue to advise the bank's top managers after he joins Blackstone.