A hellfire sermon for HSBC’s boss

Matthew Lynn says shareholder activist Eric Knight is right to castigate HSBC’s strategy, and that the bank’s deeply religious chairman Stephen Green now faces a battle to hang on to his job

When he isn’t running the world’s second biggest bank, Stephen Green, the chairman of HSBC, is an ordained priest and amateur theologian. In 1996 he published Serving God? Serving Mammon? Christians and the Financial Markets, in which he explored whether you can do the Lord’s work whilst also commuting to Canary Wharf every morning to do battle in the boardroom and kick ass on the trading floor. ‘Christians can serve God in the world of finance and commerce, but it is also possible to fall into the trap of serving Mammon there,’ he wrote. ‘Yet the kingdom of God can be found in the thick of the markets.’

The trouble is that some investors and analysts — predictably, you might well argue — have been signalling that they would like a bit less theology and a bit more Mammon. In the past few months, Green and HSBC have been on the receiving end of a ruthlessly orchestrated campaign by the Monaco-based hedge-fund manager Eric Knight and his firm Knight Vinke. After building up a stake in the bank, Knight had been pushing for an overhaul of its strategy. His campaign has culminated in a series of full-page newspaper ads that called on HSBC to consider ‘radical alternatives’ to ‘unlock the very substantial value of the group’.

What happens to HSBC matters. Britain has only a handful of truly world-leading multinational companies: BP, Glaxo­Smith­Kline, Vodafone, HSBC. But once aggressive, publicity-savvy hedge-fund managers sink their teeth into you, however big you are, the outcome is rarely in doubt. It’s not long since another hedge fund, TCI, started picking holes in the strategy of another major international bank, ABN Amro — which in consequence is about to fall into the clutches of Royal Bank of Scotland, Fortis of Belgium and Santander of Spain and be carved up between them.