The City Diary: World's vocal bank doesn't know if it's coming or going
Sunday 26 September 2010
"It is nonsense that the group chief executive threatened to resign unless he was appointed chairman.
The suggestion is offensive to Mike [Geoghegan, chief executive] and to the company. As previously stated, the board is working under due process to finalise HSBC's succession plan following Stephen Green's already announced departure and this proceeds in line with the scheduled timetable."
So said HSBC spinner Patrick McGuinness on Wednesday as the bank explained the unedifying internal battle to succeed Green as chairman. By the next day, the world's vocal bank was back with another statement, which read: "Douglas Flint will succeed Stephen Green as group chairman and Stuart Gulliver will be appointed group chief executive, following Michael Geoghegan's decision to retire early next year."
Whoops! A one-off communications clanger? Sadly not.
That slip followed the bank spinning Geoghegan's decampment to Hong Kong last year as a "strategic switch". Still, during Geoghegan's efforts to land himself the chairman's role, he's also understood to have lobbied to do the top job while remaining in Hong Kong (where he trousers an £800,000 annual living allowance) instead of returning to the chairman's London office.
A two-off then? Er, perhaps not. In August, in response to inquiries from this newspaper about the bank reviewing where it locates its HQ, an HSBC email arrived entitled: "HSBC not leaving London."
A month later and that view already looked out of date when Gulliver, then investment banking head, admitted: "It is clearly possible that the [Banking] Commission comes up with a recommendation to break up the banks [and that] has significant implications for where we may choose to headquarter our institution".
What a terrible run of luck.
Incidentally, I recall HSBC's 2007 results conference a year after Geoghegan had become chief executive. Chairman Green, an ordained minister in the Church of England, lest we forget, introduced his colleagues thus: "Mike Geoghegan, group finance director, and Douglas Flint, group chief... urhh.'' The man's a prophet.
He's behind you!
While I'm on the subject of HSBC, has anybody noticed the uncanny resemblance between Geoghegan and camp actor Christopher Biggins?
One will forever be remembered as playing Widow Twanky to somebody else's Cinderella, while the other once won I'm a Celebrity. Are they related?
Geoghegan's doppelgängers are no joke
And finally on this theme, comedian Phill Jupitus has another Geoghegan lookalike theory. At a bank party six years ago, he was unfortunately booked as the cabaret when his funniest gag was about Geoghegan looking like the late pop star Robert Palmer (have you never seen Christopher Biggins, pal?) The hosts put on a brave face following Jupitus's off-night. "We've had comedians at this party for years and I think he raised as many laughs as any of them," a spokesman admitted.
Has Sorrell fallen out of love with the Celtic Tigger?
WPP boss Sir Martin Sorrell moved the company's headquarters from the UK to Ireland two years ago to avoid a tax that he estimated would have cost his company tens of millions of pounds a year. But now that Ireland has become the Celtic Tigger, I wonder: has O'Sorrell fallen out of love with the country?
Around the general election he kept hinting that WPP might return to Britain if a change in the tax regime merited it. And now I notice that a stock-exchange filing reveals he's switched his overdraft (guaranteed by more than £50m worth of WPP shares) from Allied Irish Banks to HSBC.
Bull or bear, Buffett knows his markets
Here's the so-called Sage of Omaha, Warren Buffett, talking up the US economy on 13 September. "I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board."
And here's Buffett talking down the US economy last week. "The average American is below where he was before, or his family, in terms of real income, GDP. We're still in a recession. And we're not gonna be out of it for a while, but we will get out of it."
Fair enough, he must have changed his mind. But I notice that one day after the Sage's bullish comments it emerged he'd just pocketed $34m by selling shares in Moody's, the credit rating agency. Now Buffett has suddenly gone bearish, I wonder what the wily old thing is eyeing up to buy?
Bodog bets fair
Those generous bookmakers at Bodog have made a market on the flotation of rival gambling group Betfair, which was announced last week. Bodog began by offering even money that Betfair's float would value the firm at more than £1.4bn, while a valuation under that figure was priced at 8/11.
The listing will allow founders Andrew Black and Ed Wray to cash in, but I think even they would admit that £1.4bn is higher than most market watchers expect (currently £1bn-£1.2bn).
So it proved. "Some very shrewd punters have dipped into the 8/11 under £1.4bn," admits my man crunching the numbers, "so we are now 1/3 under, 2/1 over". He won't say what the pricing error has cost the bookie, but I wouldn't worry. Last week, this column argued the Betfair float "would seem impossible ... without 23 per cent stakeholder SoftBank taking a multi-million-pound loss" – a mistake that anyone could make.
Gekko: The anti-hero who just keeps giving
Here's a bunch of traders at spread betting firm, City Index, all dressed up as Gordon Gekko – the anti-hero of the film Wall Street and its soon-to-be released sequel, Money Never Sleeps.
It was not intended to happen this way, but Gekko became a role model for many a City trader – so much so that the spread-betting firm has now decided to cash in on the new release by "partnering" with Fox (the filmmaker, not Bud from the first movie).
That means there'll be plenty more of this type of thing, and no doubt loads of reworkings of the great Gekko lines such as "greed captures the essence of evolutionary spirit", and the one about "if this guy owned a funeral parlour nobody would die".
Sadly, however, none of this will be at the UK premier, which I hear has been cancelled due to the ill health of the film's star, Michael Douglas.
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