HSBC chairman Stephen Green appointed trade and investment minister in British government

HSBC chairman to step down, join UK government

LONDON — HSBC Holdings Chairman Stephen K. Green will leave the bank to become Britain’s minister of state for trade and investment, the company announced Tuesday.

Green will retire from the bank by the end of the year — HSBC did not announced a specific date — and take up his new post in 2011.

Prime Minister David Cameron said Green will make an “invaluable contribution” to driving economic growth in Britain as the government seeks to open new trade links, promote British business overseas and maximize inward investment.

The new job is unpaid but includes an appointment to the House of Lords, since ministers must be drawn from Parliament.

HSBC did not announce a successor to Green. Speculation has centered on John Thornton, a non-executive director who heads the bank’s remuneration committee, and Simon Robertson, HSBC’s senior non-executive director.

HSBC, under Green and Chief Executive Michael Geoghegan, weathered the credit crisis without government help. Instead, the bank turned to its shareholders to raise 12.5 billion pounds ($19 billion).

Green became chief executive just as HSBC was concluding its takeover of Household International Inc., the Illinois-based consumer lender. The acquisition made HSBC the biggest subprime lender in the United States, which led to billions in losses when the credit crisis hit.

HSBC is in the process of closing down Household, recently selling parts of it to Spanish bank Santander.

HSBC, like Barclays, has expressed concern about possible regulatory changes. Some members of the government have advocated rules to separate retail banking and investment banking, which is seen to carry greater risk.

Such a rule “has significant implications clearly for where we may choose to headquarter our institution,” Stuart Gulliver, head of HSBC’s investment banking division, told an industry conference last week.

HSBC’s decision to move Geoghegan to Hong Kong also fueled speculation about a possible shift to the east, although the chairman and company headquarters remained in London.

Green, 61, who is also a Church of England priest and chairman of the British Bankers’ Association, joined HSBC in 1982 and served as chief executive from 2003 to 2006.

He began his working life, however, at the Ministry of Overseas Development, then jumped to the private sector with McKinsey & Co in 1977.

He will replace Mervyn Davies, former chairman of Standard Chartered bank, who is returning to the private sector.

Last year, Green apologized for errors made by banks which contributed to the global credit crisis, but defended the industry as essential.

“The banking industry has not covered itself in glory to say the least, and indeed the industry collectively owes the real world an apology for what has happened, and it also owes the real world a commitment to learn the lessons,” he said in the October interview with the British Broadcasting Corp.

Green said bankers needed to learn lessons about governance and ethics to avoid a repeat of the crisis.

“You can’t do all this simply by setting rules and regulations, you have to expect the leadership in the industry to nurture a real culture of ethics and integrity and that’s actually a continuing priority, perhaps the greatest priority of all as far as I am concerned for the boards of banks,” he said.