Troubled HSBC Seeks Help From PR Agency
HSBC is preparing to hire a public relations agency to give it global strategic advice as it is struggles with a weak share price and difficulties in several parts of its empire.
The bank has spoken to several firms and is planning to choose one before the end of the month.
The move comes after an unusually troubled period for the UK's biggest bank. Once seen as one of the most high- quality banks in the world, it has recently come under attack from investors and analysts for its poor share price performance compared with other banks and over bad debts at its US sub-prime lender, Household.
HSBC confirmed it was talking to various PR firms. The appointment will be a significant shift for the bank. While HSBC has used PR agencies for certain projects, it has not previously taken wide-ranging strategic advice from external consultants.
The bank has been criticised for being unresponsive to the outside world. Its new chairman, Stephen Green, and chief executive, Michael Geoghegan, are trying to change that, people close to the bank said. After being promoted to chief executive last May, Mr Geoghegan visited 23 countries in August to meet staff. HSBC started speaking to PR agencies in November. This was before the publication of its third quarter earnings in December increased pressure on the bank by revealing rising bad debts in the US.
City sources said they believed that a recent spate of poor publicity has increased the urgency at the bank to seek external help.
HSBC has been under a cloud for some months. Some investors have questioned whether Mr Green was capable of stepping into the shoes of his powerful predecessor, Sir John Bond, who retired last May.
HSBC's shares have underperformed for several years and attempts to grow its investment banking business have failed to get off the ground, according to critics.
Supporters of the bank argue that just as Mr Green is under pressure now, there was similar discontent in 1998 when Sir John replaced Sir William Purves, widely believed to have been a visionary banker who created the modern HSBC.
There is a view in some quarters of the City that HSBC's tradition of promoting its chief executive to executive chairman should end with Mr Green.
Investors prefer chairmen to be non-executive and appointed from outside a company so they can be more independent.
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