In recent weeks there has been much speculation about senior management roles at HSBC and Hang Seng Bank thanks to David Eldon's pending retirement. These speculations were finally put to rest last night with the announcement of a succession plan.
Eldon - who joined HSBC after it acquired the British Bank of the Middle East - will step down next May after 37 years of service. His career was lauded by HSBC global head, Sir John Bond who noted, "his outstanding contribution during a long career" and the "excellent shape" he leaves the bank in.
Those that know Eldon well will readily agree that his diplomatic and urbane manner helped steer the bank through the minefield of the 1997 Hong Kong handover (as chief executive of the Hongkong and Shanghai Banking Corp), while his experiences as a banker through good and bad times were invaluable during the Asian crisis. He became chairman of Hongkong and Shanghai Banking Corp in 1999 and of Hang Seng Bank in 1998.
Indeed, one of the things that made the 59 year old's succession a little tricky was precisely the fact that he held both the title of chairman at Hongkong and Shanghai Banking Corporation and at HSBC's 62.14% owned subsidiary, Hang Seng Bank.
Meanwhile, since 1998 Vincent Cheng had held the title of Vice-chairman and CEO at Hang Seng Bank. Similarly, Michael Smith had been made CEO of Hongkong and Shanghai Bank in January. The dynamic Smith (see the related article that profiles him - click here) had come in to shake up some of the bank's operations in Asia, while Cheng - who has been with HSBC since 1978 - is known for having very good guanxi in Mainland China.
The solution to the succession seems to have been to split the chairman roles at the two banks between the two. Cheng becomes the first ever Chinese to hold the Chairman role at the Hongkong and Shanghai Bank - quite a distinction given that it was founded in 1865. Smith takes the chairman role at Hang Seng Bank.
However, Smith also retains his role as President and CEO of Hongkong and Shanghai Banking Corp - the position which carries the most day-to-day responsibility for running HSBC in the region.
Moving Cheng over from Hang Seng made sense from another perspective. The new Vice-chairman and CEO of Hang Seng Bank is Raymond Or - previously General Manager of the Hongkong and Shanghai Banking Corporation - and it was felt that he would not be able to fully implement his authority if Cheng remained chairman. After all, it is difficult to remain a hands-off chairman when you have run an organization for the previous six years.
The part of the reshuffle that most of the Hong Kong media will focus on, however, is the long-rumoured appointment of Peter Wong, 53, as HSBC's Executive Director for Hong Kong and Mainland China. Wong is replacing Or.
Wong joins from Standard Chartered where he recently resigned from the role of Director for Greater China Operations. What makes this move all the more interesting is that HSBC only rarely makes senior external hires - preferring to groom talent internally through its IM programme. Moreover, it is even rarer for it to hire senior staff from Standard Chartered, the bank that has historically been its strongest Hong Kong competitor. Indeed, if you look back over the two banks' histories in Hong Kong they encapsulate a traditional rivalry much like Coke and Pepsi - although that comparison carries less weight today given that HSBC has grown into a very much larger bank in the past two decades.
Indeed, Wong's defection from a top role at Standard Chartered to HSBC will be interpreted by many as a negative sign for StanChart. Losing management of that seniority to a rival raises eyebrows. (Wong is currently on gardening leave and will report for duty at 1 Queens Road, Central on April 1.)
In a final management shuffle, Joseph Poon becomes Deputy Chief Executive of Hang Seng Bank, moving over from the Hongkong and Shanghai Banking Corp where he was the Senior Executive of Commercial Banking.