Read all about it in the new history of HSBC
The Lion Wakes: A Modern History of HSBC was published recently to coincide with the 150th anniversary of HSBC Holdings. It is an official history, commissioned by HSBC, by historians David Kynaston and Richard Roberts.
was published recently to coincide with the 150th anniversary of HSBC Holdings.
It is an official history, commissioned by HSBC, by historians David Kynaston and Richard Roberts.
But it has, albeit unwittingly, provided some context for the Swiss scandal currently swirling around the bank and others such as the money-laundering disaster in Mexico.
In striking contrast to previous histories of the bank, the authors have produced a highly readable, absorbing and relatively unvarnished account of HSBC and its emergence as a global bank.
The descriptions of HSBC's takeover of Marine Midland, the UK's Midland Bank and the earlier failed attempt to take over the Royal Bank of Scotland in 1981, along with talks of a possible merger with JP Morgan are fascinating reading.
John Bond speaks intriguingly of when he was chairman and being invited to take a 25 per cent stake in Lehman Brothers, Long-Term Capital Management, and being offered the possibility of acquiring ABN Amro.
"Any one of those would have been a disaster," he adds, just one of the many insights from current and former senior executives to be found in the book.
The book adds weight to the defence that the current chairman Douglas Flint and chief executive Stuart Gulliver have frequently voiced in recent months, that the bank differed significantly at the turn of the century from what it is now and adds some context to frequently asked question these days, "Is HSBC too big to manage?"
There is considerable discussion about how the rapid growth of HSBC in the 1990s and having its roots in a much smaller bank meant that its historic federal model was unable to keep up.
"Because local knowledge is so important the responsibility for running our businesses around the world lies with our local CEOs - all 77 of them," Bond said in 2005, reiterating what was considered to be an essential part of HSBC's core culture.
However, there were, as early as 2006, dissenting voices such as Gulliver's even before he was chief executive, arguing for a more centralised approach.
"Defaulting to geographic management is the easy option…. Functional management is very hard to do well - particularly in this group - but to choose not to do it is a cop out," he wrote in a letter to the then chief executive Michael Geoghegan.
"That largely decentralised system had worked well up to the mid-1990s, when the group was much smaller and the international officers were the authoritative, homogenous and highly mobile transmitters of HSBC's distinct DNA; but after the group had tripled in size in a matter of five or six years, bringing into it hugely increased complexity but also unfamiliar territories, businesses and cultures, that federal mode was found badly wanting…" the authors conclude.
And so it was that in February 2013 Gulliver told the British Parliamentary Commission on Banking Standards that he had changed the organisational structure of the bank since becoming chief executive from being run by 88 separate country heads who reported to the group chief executive, it was instead run by global business heads so that information came to the centre.
"It is very easy from outside," added Gulliver, "to see this as a trivial change, but it is the biggest organisational change in the firm - I am not exaggerating - since 1865."
The next few years will tell if the reorganisation has worked and HSBC can be managed.
