HSBC’s forex chief retires as bank makes highest-ever forex profits

Rob Loewy, head of foreign exchange at HSBC for the past 15 years, retired last week as the bank announced its highest-ever dealing profits for foreign exchange.

The bank has installed Mike Powell, head of global markets and treasurer for Europe, as temporary head of foreign exchange until a permanent replacement is made in the next three or four weeks.

The new manager will take on responsibility for continuing the bank’s steady single-digit percentage growth in forex profits over the past five years, which reached $1.24 billion in 2003, the bank said last week.

Part of that increase - a 6% rise on $1.17 billion in 2002 - can be attributed to the extremely favourable trading conditions in 2003, as the dollar sank against a range of currencies over the course of the year.

Powell said the bank is a lot more co-ordinated in foreign exchange than in the past.

Stuart Gulliver, group general manager and chief executive of HSBC’s corporate, investment banking and markets division, said restructuring in New York during 2003 was key.

Also, while most banks prefer to operate one trading hub per timezone, HSBC opted to centralise trading jointly in London and Paris.

London remains the centre for most products, but euro government bonds, exotic interest rate options and all equity derivatives are priced in Paris. "This dual-hub structure in Europe has proved to be a key competitive advantage," Gulliver told RiskNews' sister publication FX Week.

HSBC inherited a strong trading team in Paris from Credit Commercial de France, which it bought in July 2000. Derivatives expertise in the centre is particularly strong, partly as a result of the French education system, said Gulliver.

Loewy worked for HSBC since joining the Hong Kong and Shanghai Bank in London in January 1989.