Banks are always anxious to ensure a swift and painless succession when it comes to sorting out the top jobs and HSBC is usually the one institution which can be relied upon to get things right.

Yet the hallowed HSBC Boardroom has been ripped asunder by a top management spat which has brought an end to its safe hands reputation. And it now joins other banks which are turning to those in the investment divisions to run things at the top.

HSBC has just announced that Michael Geoghegan, currently chief executive, is to leave the bank and will not, as usually is the historic custom, replace the outgoing chairman Stephen Green.

Mr Green sparked the round of musical chairs after he elected to follow a new career with the coalition government.

City soothsayers are amazed that Mr Geoghegan was passed over for the chairman’s chair which is going to current finance director Douglas Flint. Although Mr Geoghegan was known to be a somewhat combative and outspoken chief executive, few foresaw his being passed over for the top job. He has told the media that given his non-selection to chairman, he had no other choice but to go.

But HSBC corporate spinners were desperate for the outside world not to see the departure of Mr Geoghegan as a strop.

Chairman elect Mr Flint said, in what many might regard as the understatement of the century:
“We need to restore trust in the banking industry by learning from mistakes made in recent years.”

Mr Geoghegan said there were no ill-feelings, saying:
“It’s been historical at this company that the chief executive goes on to be chairman but you have to be asked, and the reality was I wasn’t asked.”

He leaves with £1.42 million in a severance package

Slipping into the chief executive shoes is Stuart Gulliver, formerly head of the HSBC Investment division and a promotion which mirrors the decision by Barclays bank to reward their aptly named investment chief Bob Diamond with the top job.

This worries the Government and some regulators that far from learning from their past mistakes, the banks are leaning towards the investment, and some would say, riskier parts of their businesses and forsaking the comparatively plodding retail parts. Whether this is coincidence, or key executives making sure they are on the right side of the fence should some people in the government get their way and split banks into two, remains to be seen.

Guest Article by Neil Camp 

Bank loans are continuing to be scrutinised by outsiders as an inquiry is set to consider the delicate question of break-ups.

The lack of bank loans may be one of the catalysts which is causing voices to call for a thorough review of banking and the government inquiry is determined to get to the bottom of the issue. At the heart is the vexed question as to whether banks should be split into two: one side which handles retail business and the other which handles investment business, and never the twain shall meet.

Breaking up is just one of the issues being explored by the Independent Commission on Banking and thoughts are polarised on both sides of the argument. Some say that banks should not be allowed to gamble with the investors money and get into situations which caused the current financial crisis. And that retail money must be protected from investment bankers who instead should gamble with their shareholder funds and not customer cashflow.

Others cry foul, saying that to split banks will in effect ruin capitalist principles in the UK and that many banks would have to up anchor and move to a more favourable regulatory environment. This would decimate an industry in which the UK leads; one of few which brings home the bacon nowadays.

HSBC and Standard Chartered have already fired warning shots across the Government’s bows, saying that if the rules were to be dramatically changed, then they would to move their headquarters overseas.

Sir John Vickers will head up a five strong panel and he was quoted as saying:
“Experience shows that the risks from not asking hard questions about financial stability and competition are far greater than from doing so.”

Sir John is the ex-chairman of the Office of Fair Trading and is joined by another non-banker ex-regulator Clare Spottiswoode who’s the former director-general of Ofgas. Others might raise an eyebrow at the others on the panel, wondering if a few foxes had got into the hen house.

They are Bill Winters, the formerly co-chief executive of investment bank JP Morgan; the chief economics commentator at the Financial Times Martin Wolf; and, Martin Taylor, who is a former chief executive of Barclays.

The first recommendations will be ready about a year from now, in September 2011.

Chief apologist for the banks, Angela Knight, in her role as chief executive of the British Bankers’ Association, trumpeted that the banks had nothing to hide and that they welcomed the commission:
"We believe the UK industry has already taken significant steps to improve its financial position.”

It’s now a matter of wait and see. Bank loans will remain under scrutiny for a good while yet.

Guest Article by Neil Camp 

Two of the UK banks are changing chiefs.

Banks Barclays and HSBC will shortly have new faces in charge as Bob Diamond comes in as the new chief executive officer at Barclays and Stephen Green, chairman of HSBC, takes a coalition government brief to become a trade minister.

Barclays Diamond is well-named, being one of the world’s highest paid bankers who has made around £100 million as head honcho at the group’s investment arm, Barclays Capital. He will replace the current chief executive officer at Barclays, John Varley. Mr Varley is credited by many as being the safe pair of hands that steered the ban through the financial troubles of the last couple of years.

Mr Green ends a 28-year career at HSBC, one of the world’s biggest banking groups, to help the coalition government. During his tenure at HSBC, he held the post of chief executive officer for three years and the top job of chairman for four years.

BBC business guru Robert Peston said of the Green appointment, that it “…will doubtless be heralded as a coup by the prime minister, even though the record of business people in government has been patchy.” Commenting on the Barclays appointment, Mr Peston ventured the opinion that the appointment of Diamond confirmed the view that Barclays sees its future firmly as a global investment bank.

The chairman of Barclays Bank, Marcus Agius, was quoted as saying that Diamond was “…superbly qualified…”, complete with “…a proven track record as a business leader…”.

Mr Diamond responded with:
“I am honoured by the board’s confidence in me and greatly motivated by the challenge of leading Barclays during the critical period ahead. As a leading global universal bank, Barclays has the right model, the right strategy and above all the right people to deliver for all our stakeholders.”

Mr Diamond is said to be on a base salary of £1.35 million, with a bonus scheme taking his total take-home package to be nearer £12 million.

As if to ward off any criticism over Mr Diamond’s remuneration package, a Barclays spokesman said:
“The compensation arrangements have been benchmarked against a peer group of global universal banks, industrial companies and financial services institutions.”

Which proves that the banks still have some money to throw around.

Guest Article by Neil Camp

Despite talk of low interest rates for the foreseeable future, those holding super-low tracker mortgages are being warned they will face dramatic rises in payments, some as much as £7,000 a year.

Many of those that took out tracker mortgages in 2007 have benefitted enormously from the recessionary low interest rate environment, much to the chagrin of the building societies and banks which originally wrote the business. But as these mortgages had a two-year break, they will default back to their lender’s standard rates. For example, on a £200,000 interest free loan, currently at 0%, but facing a hike to 3.5%, monthly repayments could rise by nearly £600, meaning some £7,000 extra in repayments over a year. On a £500,000 mortgage, this could mean a whopping £17,000 extra payments a year.

Economists think that interest rates could stay at 0.5% for at least another year.

Many with tracker mortgages at the Halifax face some of the biggest rises. Those who took out deals in the first half of 2007 which gave them a rate calculated at 0.51 points below the Bank rate, will be heading for a new rate of 3.5%; meaning an increase of hundreds of pounds a month.

Default rates differ from lender to lender. HSBC offer 2.89% on a two-year fixed deal, with there’s a hefty fee of £1,499. They also offer a five-year deal at 4.39%, with the lesser fee of £999. Cheltenham & Gloucester are currently at 2.5%, as is the Nationwide. The Council of Mortgage Lenders say the average is currently at just over 4%.

Guest Article by Neil Camp

If you suspect you have money lying around in a bank, or building society account, claim it now before the Government does.

Later this year, money held by banks in dormant accounts is set to go to good causes.

A Government taskforce has recommended that any money left in an account which has had no customer activity in the last 15 years, should be transferred into a special fund. This will be administered by a special social bank which will recycle the unloved millions to worthy causes, such as helping the long term unemployed. The exact date of when this will happen is still not clear, but many think it will be in the autumn.

Dormant accounts can of course be a result of many circumstances, some just as simple as a change of postal address. Others might be a change of name, or a death of the account holder.

But certain consumer groups are worried that the banks, hit by the latest financial crisis, might not be that keen to either find the rightful owner, or donate it to charitable causes.

The banks claim otherwise, stating that they are successfully reuniting customers and their long lost money. Take the Lloyds Banking Group, which has since 2006 found homes for 23 million of its lost notes. Mind you, with an estimated near £100 million still lost and forlorn, there is still quite a bit of work to be done.

HSBC has been actively promoting its dormant accounts and recently announced that it had repatriated nearly £6m to over 3,500 customers.

And for those panicking that they know they had an old account somewhere, but just couldn’t place it, all is not lost when the social bank starts syphoning off the lost money. By law, it will still remain the property of the person that can prove it was originally their money, but the big difference will be that once it has been labelled dormant and moved to the social bank, it will be a lot harder to get, taking months to sort out the paperwork. You will be able to reclaim it, but just with a lot of effort.

For those that want to check if they have misplaced an account, the best place to start is www.mylostaccount.org.uk. This is a joint effort from the British Bankers’ Association, the Building Societies Association and National Savings & Investments. It saves time and effort, allowing you to check across a wide range of financial organisations. But, although the single website initially simplifies the start of the search process, the range of questions and details required can be quite onerous. So a casual fishing trip is a bad idea; it is a good idea to have a real think about names and other details pertinent to your claim.

You can of course go direct to the bank where you think the account might be hiding, but you will need to supply quite a number of personal details in order for them to answer your queries.

And it’s not only bank accounts that you should check. Many lottery winners don’t come forward, not realising they have perhaps won a major prize. And after 180 days, the money goes to good causes and can’t be claimed after that date. The lottery helps by arranging for publicity for any unclaimed prize over £50,000 in the area where it was bought, but still many millions remain unspoken for. So, check any lottery tickets lying around, before they run out of course.

Betting slips have no such expiry and have to be honoured no matter how late they turn up.

But there’s a whole host of other prizes and benefits which are not claimed, from pension and life insurance polices which are forgotten; to share certificates (from holdings in companies, or bonds); unclaimed state benefits (they reckon that £9 billion of government handouts such as pension credits are unclaimed every year); and, premium bonds.

So, when you’re having a good spring clean, rummaging around old boxes of papers and personal effects, keep an eye out for anything that might lead to an unclaimed prize, or asset. It might be very worth while taking the trouble.

Guest Article by Neil Camp