By IFR Editor-at-large Keith Mullin
LONDON, July 11 (IFR) - HSBC sure has been busy in the pastfew days: senior management changes announced this week stemmingfrom Brian Robertson's impending retirement follow a re-organnounced last week of Samir Assaf's Global Banking & Marketsdivision in a move designed to tear down internal barriers andcreate a more client-centric dynamic.
So Brian Robertson, CEO of HSBC Bank plc, the unitresponsible for group operations in the UK, Europe, Turkey, theMiddle East, Africa, and Bermuda, is standing down after 38years at the group. The former group CRO is said to be retiring.Banks strangely appear to have commandeered a new definition ofthe concept of retirement: not only will Robertson continue aschairman of HSBC Turkey and a director of HSBC Malta, he's alsoadding the chairmanship of HSBC Latin America and will also be adirector of HSBC North America Holdings.
Doesn't sound like retirement to me. In fact it sounds he'llbe pretty damn busy, to the point where I enquire whether he'sactually been retired, as it were, by group CEO Stuart Gulliver.But I'm told no.
On the plus side, he's got some great holiday destinationsin his geo-suite.
Gulliver has tapped Alan Keir to take over from Robertson;Keir will in turn be replaced as CEO of global commercialbanking by Simon Cooper, currently deputy chairman and CEO ofHSBC Middle East and North Africa. As the final link in thechain of change, Mohammad Al Tuwaijri, the swashbuckling formerfighter pilot who's seen combat in the Gulf, is adding Cooper'sresponsibilities to his existing role as head of GBM for MENA.
STREAMLINING FOR EXCELLENCE
As for Assaf's GBM re-org, I must say it bears the hallmarksof those endless and obsessive investment bank efforts to getcloser to clients. Clients think it's creepy. I've lost count ofhow many re-cuts, re-stacks and re-thinks I've seen across theinvestment banking landscape over the years.
In fact, if I'd got a fraction of the no doubt bountifulmanagement consulting fees spent on every banking re-org I'veseen, I would probably have done a Robertson by now and'retired'. I see myself hanging out in some balmy sub-tropicalparadise. Would definitely beat grainy South London, which isneither balmy nor sub-tropical (sub-normal maybe ) Not exactlya paradise either.
The thing is: without any real fundamental change to HSBC'sGBM model (which Assaf believes is the right one), no additionalbanking firepower and no adjustment to the product suite, whatwas in effect a streamlining has arguably ended up creating atougher proposition - a product-agnostic one - for the bank'sclient relationship managers and coverage bankers. It does crossmy mind that it might end up being another one of those ratherfutile exercises in re-arranging the deck chairs.
All of that said, it does look neater on paper. Theseparation of product from coverage via the creation of aholistic client coverage segment - to be run out of London bycurrent co-head of global banking and head of Asia GBM RobinPhillips - does perhaps provide a better level of focus. It'llbe responsible for client strategy as well as country and sectorcoverage while it'll share the credit and lending function withSpencer Lake's new capital financing gig.
You'd imagine that Alain Renaud, global head of M&A, willend up reporting into client coverage, although that piece ofthe org structure is one of the many loose ends to be clarifiedahead of the August 12 go-live date.
I do wonder how Kevin Adeson feels about being moved fromhis current role co-heading global banking with Phillips to hisnew role of vice chairman of GBM. You always kind of get thesense that being moved to a VC role to concentrate on priorityclients and drive internal business collaborations etc is a bitof a non-role dressed up to enable the incumbent to save facewhile he or she figures out what they're going to do next. Butthese days, I'm not so sure that's the case. Certainly the sheernumber of experienced bankers taking up these roles suggeststhey have some value. In Adeson's case, I guess time will tell
I imagine Lake is delighted at having picked up a muchbigger role as the execution man feeding Phillips' clientfranchise as keeper of all of the primary businesses. He willnow run asset-backed finance; asset and structured finance, DCM,ECM, leveraged and acquisition finance, M&A execution andproject and export finance. His move leaves Jose-Luis Guerreroas sole head of global markets and I imagine equally delighted.
Yanking DCM out of global markets and melding it with theother primary businesses was a good move. HSBC insiders get veryprickly when you suggest their investment banking or tradingbusinesses underperform the competition or undershoot theirpotential. But the pretty middling performance in many of theareas it's active in must surely be an irritant.
As I've written before, the only area of capital marketswhere the bank can realistically lay claim to being among themarket leaders is in DCM so I guess the thinking is placing thedebt origination and execution piece at the centre of thefinancing businesses will rub off on the rest and pull them out(in some cases) of their current rather mediocre state.
INVESTMENT BANKING ALCHEMY
The aim of creating the ultimate client-focused investmentbank - which has always been but is much more so today a greatpopulist play - is a bit like a service-industry version ofalchemy, that quest to create gold from base metal. In thatspirit, some banks have become addicted to it and engage inincessant tinkering to see if it makes a marginal difference.The problem is, I'm not sure it's always clear thatorganisational change of itself leads to positive and lastingchange, which is presumably why org shifts are such an industryconstant.
The other problem with 'reorgitis' is that it never has anynatural end-point. That's great for consultants and keepsinternal strategy folks in jobs, but as you follow there-organisation cycle endlessly round and round, you inevitably,invariably and by definition end up switching back to somethingyou did years ago probably without even realising it.
Assaf is an affable and very smart cookie; a real thinker.He didn't re-cut the GBM segments purely for the good of hishealth or to give him something to do. He's doing it to makemore money by taking market share from his competitors. And youcan be sure he discussed this internally at great length. NowSamir is not a man of few words (I'm talking hind legs anddonkeys here, if you get my drift) so when I say great length Isuspect it really was.
For a bank the size and stature of HSBC, I've got to sayAssaf is right to want to push for a bigger market share. Myfundamental question is why he's waited so long to make hismove; after all he's been head of GBM for two and a half yearsand the bank has never really mounted a serious challenge toindustry leaders.
There's been no discussion about how far HSBC wants toprogress under the new structure in terms of its industryposition. I'm sceptical that it'll significantly move theneedle, but if I'm proved wrong, I'll happily say so in a futureinstalment. But by then, the bank will probably have doneanother re-org.
HSBC Holdings (HSBA)