24 September 2010 Last updated at 17:22 ET

HSBC confirms boardroom shake-up

HSBC has confirmed that its chief executive Michael Geoghegan is to be replaced by Stuart Gulliver - currently the head of the group's investment bank.

Douglas Flint, currently HSBC's finance director, has also been confirmed as the replacement for outgoing chairman Stephen Green.

Mr Green took up an offer of a UK government role earlier this month.

The moves mark a significant shake-up of leadership at the UK's biggest bank.

Earlier HSBC denied reports that Mr Geoghegan was quitting after being told he was being overlooked for the position of chairman.

The bank has a history of promoting its chief executive to the chairmanship and Mr Geoghegan had been seen as a front-runner in the race to replace Mr Green.

'I wasn't asked'

In a conference call following the announcement Mr Geoghegan denied there had been any ill feelings over the chairman's job.

"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 said, adding that Mr Green's decision to leave had "triggered" him to consider his own future.

Mr Geoghegan will receive a severance package worth £1.42m when he leaves HSBC at the end of the year, while as chairman Douglas Flint will receive an annual salary of £1.5m.

Stuart Gulliver's new chief executive salary will earn him £1.25m a year, plus pension benefits an a bonus worth up to four times his salary.

In its statement HSBC said the appointment of Mr Flint as chairman has been made by a unanimous decision of the board.

"The nomination committee came to the unanimous conclusion that Douglas Flint was the best person - internally or externally - for the position, meeting all the core criteria," it said.

His appointment has also been approved by the City regulator, the Financial Services Authority (FSA).

'Fundamental change'

Mr Flint called the appointment "a privilege".

"Our industry is in the midst of fundamental change which will redefine have banks operate," he said.

"At the same time we need to restore trust in the banking industry by learning from mistakes made in recent years."

Mr Geoghegan gave no indication of any boardroom bitterness in his statement, calling Mr Flint and his own replacement Stuart Gulliver "an awesome combination".

Mr Gulliver will take over as the new chief executive from January next year.

The moves are the latest in a series of moves among the UK's top bankers.

Earlier this week the chief executive of the Lloyds Banking Group, Eric Daniels, announced his plan to retire in a year's time.

And earlier this month one of the world's highest paid bankers, Bob Diamond, was confirmed as the next chief executive of Barclays.