The man behind Birmingham's own bank

The man behind Birmingham's own bank

HSBC is moving its UK retail headquarters to Birmingham. BQ editor Steve Dyson meets Nigel Hinshelwood, the new head of the ring-fenced bank.

After decades of listening to top bankers hark on about international markets from the confines of the City of London, it was refreshing to hear one of them talk so positively about Birmingham.

“This is the UK’s most investable city for the second consecutive year,” says Nigel Hinshelwood, the new head of HSBC UK, and deputy chief executive of the wider HSBC bank. Hinshelwood is sitting in HSBC’s Edmund Street offices in Birmingham city centre, ahead of the bank’s move to its new UK headquarters at 2 Arena Central, across town on Holliday Street, which should be complete by 2018.

And he really is underlining the attraction of the UK’s second city: “We could have gone to many different areas, but we chose Birmingham because we found the city council was making it such an attractive home for businesses. It’s an area under change – you can see the investment. We thought it was a great city to come to, to be part of that growth.”

Hinshelwood also mentions the bank’s history in Birmingham, where one of its predecessors, the Birmingham and Midland Bank, was founded in 1836. But that’s the only historical reflection, as he insists the move is because Birmingham is one of the UK’s main marketplaces.

“Our decision to move out of London was made because we want to be closer to our customers,” he says. “It’s a symbolic move, re-energising the business within the communities we serve. By coming here we’re getting ourselves into the heartland.

“There are more business start-ups registered here than in the south. We have more than a million commercial customers across the UK, and more than 200,000 of them are in the Midlands. They are a core part of the business, and that’s one of the reasons we chose to base our HQ here.”

Hinshelwood’s not stopping there – he lists yet more reasons why Birmingham’s such a good base: “There’s the risk perspective; having all your eggs in London is not necessarily the best thing. This gives us the opportunity to create employment in another city. Our move will hopefully create further development of financial services in Birmingham, and it was important to us that the necessary skills and experience are available in the wider commutable distance.”

HSBC UK has been formed to meet new rules introduced in the wake of the financial crisis of 2008. The idea is to ring-fence services that customers would get in a branch, online or that small and mid-sized businesses use, keeping them away from riskier investment banking and global operations.

The idea is that the essential parts of the business will become safer, making it less likely that normal people and UK businesses will be affected by any future international banking crisis. HSBC already has 2,500 staff in the region, and another 1,000 need to be found to run its national operations from Birmingham.

This, according to Hinshelwood, will not be a problem: “We’re already elevating the knowledge of what we’re building here, the headquarters of one of the largest UK banks. Some said ‘people wouldn’t make the move’, but that wasn’t the response we had when we sent notes to 45,000 staff this Easter.

“We told them nothing about HSBC but all about Birmingham and the Midlands, living here, the schooling and so on. We’ve already had more than 1,000 colleagues registering their interest. So now it’s about matching experience, skills and desires to the available roles.”

A group of HSBC volunteers called ‘Birmingham Buddies’, already living and working in the city, spend time talking to would-be colleagues, and showing them what the city has to offer. Hinshelwood himself was impressed with his ‘buddy’.

“The only way to get to know Birmingham is on your feet,” he explains. “And so in mid-February, when it was very wet and cold, I had my own mini tour from a very understanding and knowledgeable young colleague, Arron Shelley, a senior project manager in our transformation team. What struck me was how manageable it is to walk around everywhere. From the Jewellery Quarter to the new railway station, and then to China town.”

Will Hinshelwood be living in Birmingham himself? “Yes, my intention is to spend more and more time here, and then to come and live here in 2018. I can see a number of areas where I might buy a place. Different people have said Edgbaston, or the Jewellery Quarter, but I might even look at Digbeth, as opening up that thoroughfare when they move the markets could make it a really accessible area.

“Wherever, I like the city, and I’ve already talked with my wife about what we might do. She works in London, and so we’ll keep our home there, and I’ll spend about three days in London, the balance in Birmingham.”

The ‘move’ date of 2018 is good for the Hinshelwood family, as they have three “nearly grown up” children: twin girls, aged 16, and a son, 18. And moving’s no issue for Hinshelwood himself, as he’s been on the road most of his life. Born in Glasgow 50 years ago, he moved to England aged six. After school, picked up hotel and tourism qualifications from Oxford Brookes University before starting work with Trust House Forte. He then travelled to Australia aged 21, because of his great love of fishing and boats.

This saw him work on dive boat and game fishing boats before he focused on technology for stevedoring companies, which organise cargo-handling in ports. Then he moved into financial services, becoming a partner at Ernst & Young (now EY) in Australia in 1997.

He held senior roles with management consultants Capgemini in South East Asia and then with global IT specialists Unisys in Singapore, before joining HSBC in India in 2005 as head of business transformation. This saw him visiting China, the Philippines, Sri Lanka and Egypt to mention just a handful of countries, before landing back in the UK in 2007 after working overseas for 20 years.

Since then Hinshelwood’s held various senior HSBC positions: global chief operating officer for insurance; chief technology and services officer; and chief operating officer – first for the UK, then for Europe and then for the Middle East and Africa.

His last position before the HSBC UK role was as group general manager and global head of operations, looking after tens of thousands of staff. In short, the West Midlands is getting a huge chunk of experience in the man behind what’s effectively going to be Birmingham’s own bank.

“There’s real momentum growing with the SMEs in this region,” Hinshelwood says. “I can see how crucial they are in the UK’s supply chain. There are some really interesting organisations we’re already working with, both small and large.”

He cites Birmingham-based Synapse as a ‘small’ example, describing how HSBC’s £500,000 finance package this January has enabled the spreadsheet solutions specialist to double their team and invest in research and development.

A ‘big’ example is SCC, originally Specialist Computer Centres, headed by Peter Rigby, also based in Birmingham, which HSBC has supported since its beginning in 1975. It’s now one of Europe’s biggest independent IT groups, employing 5,000 staff, with annual revenues of £1.5bn.

Hinshelwood’s new role will see him shape the ring-fenced business for the UK’s retail banking, wealth management, commercial banking and private banking sectors. He’ll be responsible for making HSBC UK a standalone business, a core but separate component of the HSBC group, but with all the international knowledge and experience needed by mid-market and corporate customers.

“That’s the scope,” he says. “It includes developing the financial capability to support that, with all the HR, compliance, marketing and risk management needed. I’ll be making sure we’re supporting customers with the right products, through the right channels, with the right level of service, by the right colleagues and developing the right culture to support that, delivering expectations both to shareholders and the society in which we live.”

This, he said, will include interacting with communities, the bank regulator and governmental bodies, both in a supportive way and “where necessary putting forward our position and influencing the regulatory environment”. He adds: “For the vast majority of our customers, we want them to feel no different because of the ring-fencing. It should have no impact on their day-to-day business.”

HSBC has recently announced £10bn in new lending for businesses in 2016, up from £8bn in 2015. The Midlands itself received some £1.34bn in 2015, and this will grow to £2bn in 2016, with £500m for Birmingham alone.

Hinshelwood says: “In 2015, we lent twice as much to SMEs in the Midlands than in London. Around 19% was in the Midlands, only 10% in London.”

Lending aside, HSBC is investing some £200m in its new base at Arena Central, where it’s taken out a 250-year lease. “That investment,” Hinshelwood says, “also helps the construction industry and promotes Birmingham as a centre of financial services. If we say we’re going to support a community, it’s important to show we’re doing that.

“We intend to play a full role in local communities and with business organisations, particularly around apprenticeships and the skills improvement agenda, and we’ll be focusing on helping disadvantaged young people into jobs. In Birmingham, we helped 650 get into jobs in 2015, and spent £1m on community projects last year.

“We’re now getting involved in organisations like the City of Birmingham Symphony Orchestra, Birmingham Hippodrome, the regional CBI, the Greater Birmingham Chambers of Commerce and working with the city council on supporting the city’s aspirations.”

But the main point he wants to get across is how the HSBC UK will be “committed to supporting organisations with aspirations to grow”, and that the new bank will still have all the knowledge needed for everything from importing to exporting thanks to the “power of HSBC network”.

HSBC UK already has 17 million customers across the UK, made up of around 16 million personal customers and more than one million business customers. Hinshelwood adds:  “Our aspiration is to build a bank of choice. For our customers, for our colleagues and for the way we support society in a sustainable way. We absolutely want to be a leader in the community, investing to ensure our corporate sustainability is visible in the West Midlands and everywhere we work in the UK.”