IA.Cover2.qxd 7/3/08 3:55 PM Page 1 IRISHIRISHAugust/ September 2008 AMERICA AMERICACanada $4.95 U.S.$3.95 THE WALL STREET 50Celebrating the Irish in the Finance Industry Brendan McDonagh CEO HSBC North America Holdings Inc., represents the new “Global Irish” who are joining the ranks of corporate America in increasing numbers. IRELAND’S NEW LEADER CANADA’S IRISH HERITAGE CHICAGO’S IRISH ROOTS DES BISHOP AS GAEILGE 09> 0874470 73334 DISPLAY UNTIL SEPT. 30, 2008 UNTIL SEPT. DISPLAY AIF-1 2/27/08 2:06 PM Page 1 AIF-2 2/27/08 2:30 PM Page 1 WaterfordAD 3/3/08 5:02 PM Page 1 Mutual 6/26/08 1:23 PM Page 1 IA.34-37.qxd 7/10/08 4:03 PM Page 34 34 IRISH AMERICA AUGUST / SEPTEMBER 2008 IA.34-37.qxd 7/10/08 4:03 PM Page 35 WAL L STREET50 KEYNOTE SPEAKER The Global Irishman HSBC’s Brendan ust six months after billion in bad debt as a result of the crisis, assuming his job as head but under McDonagh’s management the McDonagh of HSBC Finance in worst of the crisis now seems over. North America, Brendan The subprime segment is but a very is a new McDonagh volunteered to small part of the global HSBC brand. appear before Congress, Forbes magazine recently rated HSBC in March 2007, to address Holdings number one in its Global 200 breed of J the growing subprime ranking of companies worldwide. mortgage-lending crisis. The banking behemoth earned the dis- international It was a typical move by the 49-year- tinction by showing a phenomenal annu- old Irishman who has become known al 26 percent growth in revenues, by throughout his career for a straightfor- having 10,000 offices worldwide in 83 Irishman. ward type of management, which countries, and by having $2.3 trillion in addresses problems head on. assets. BY NIALL O’DOWD Like many other banking leaders, HSBC is the little foreign bank that McDonagh could have tried to duck and could. It started in Hong Kong in 1865 dive on the issue and refuse to appear at with just two branches, one in Hong the televised hearings, but that was not Kong and one in Shanghai, capitalizing his way. Senate Banking Chairman Chris on the trade winds that were blowing Dodd was certainly appreciative. strongly between the Chinese capital and “We take the situation very seriously the then crown colony. and we’re taking strong steps to correct At a time when the world center of problems,” McDonagh told the legisla- banking was London, HSBC’s incredible tors, and his bank directly proceeded to growth since their modest colonial do that, seeking to ensure above all that beginnings has been staggering. a way was found for homeowners to As CEO of HSBC North America (the keep their properties. “Otherwise every- holding company for all of HSBC’s U.S. one loses,” McDonagh notes. and Canadian businesses; the company HSBC had gotten caught up in the sub serves nearly 68 million customers), prime crisis after it purchased McDonagh has no doubt that the bank Household Finance in 2003, before has gone from strength to strength PHOTOGRAPH BY: McDonagh took the top job. because of its global reach. KIT DE FEVER Last year, the company wrote off $11.7 In fact, the Dublin native embodies AUGUST / SEPTEMBER 2008 IRISH AMERICA 35 UCD-AD 7/8/08 1:54 PM Page 1 IA.34-37.qxd 7/10/08 4:03 PM Page 36 the global nature of a bank that has man- and business ties on several continents. his wife. The newlyweds set out for aged to bestride the world. “A lot of us at HSBC have worked in Oman, McDonagh’s next posting, where McDonagh’s stellar career in banking many countries, and that richness of he had to adjust to the life style of the was foreordained from an early age. Born experience means that you have a deeper Middle East after the years in South Asia. in 1958 on Dublin’s Northside, as understanding, a global understanding, His globetrotting pace increased when a kid he showed an aptitude for numbers, how things work in, and between, differ- he was sent to Tokyo after Oman. which came in handy in the family ent countries,” McDonagh explained in He enjoyed his time in Tokyo enor- business. our interview, which took place at mously. It was the first of two postings in His father was a butcher who supplied HSBC’s New York headquarters on Fifth Japan – the second came a few years meat to the Guinness Brewery and the Avenue. “The foundation for us [HSBC] later, when he was sent to Kobe. Rotunda Hospital. is free trade. Globalization, at the end of In Kobe, McDonagh’s Irish roots and “What we did in those days, because the day, is good for everybody,” he says. philanthropic leanings came into play. my father had a cash business, we would McDonagh, who is now based at He helped set up the Irish Network of HSBC headquarters in the Chicago Japan which was an organization of suburb of Mettawa, Illinois, worked younger Irish who were living in Japan. with several developing nations “Actually, three of us set up a St. Patrick’s Night function in Kobe,” he recalls. “We got various people to spon- COURTESY HSBC COURTESY LEFT: Fishing in Wisconsin with lifelong friend Padraic sor – to buy the Guinness and whatever. O’Beirn of Dublin. We were planning to run it on the fly, but people came from all over – we were BELOW: April 30, 2008: surprised by the numbers. We made a Celebrating the opening of handsome profit and found, through a HSBC North America’s new headquarters in the Chicago local priest, a Korean orphanage that suburb of Mettawa, Illinois, needed support. There’s a large Korean with Group Chairman Stephen population in Japan and they, largely, are Green and Group Chief Executive less well-off. The event became so suc- Michael Geoghegan of parent company HSBC Holdings plc. cessful that it became an annual affair. I P bring the cash home and I ran a ledger for him and then we would cash checks for our neighbors who were in the check busi- ness and needed to pay salaries and wages. So we ran a bank out of the dining room in the evening time,” McDonagh recalls. It was no surprise when McDonagh took the economics and accounting route and went to Trinity College Dublin to PHOTO: JASMIN SHAH, HSBC COURTESY study business and finance. Once he qualified and anxious to see the world, he sent his résumé out to sev- eral international banks and waited. It was 1979 and jobs were not plentiful in Ireland in the pre-Celtic Tiger era. The best offer was from a vaguely exotic sounding company known as the early in his career. think the orphanage is still wondering Hong Kong and Shanghai Bank in “In those days we were headquartered who these crazy Irish people were who London. His parents were surprised. in Asia and most of our operations were were dropping money off with them “They were a little shocked when they in the Far East and Middle East,” he once a year.” realized it was based in the Far East and I explains. In 1993, McDonagh, on an upward wasn’t just going over to London for a McDonagh was in Guam for six trajectory, was transferred to London, job,” McDonagh remembers with a smile. months. Then he was sent to Brunei, in thus ending his Asia sojourn. He says Thus began the journey from butcher’s Southeast Asia. His first managerial that he learned “cultural sensitivity” dur- boy to HSBC’s top job in America. position followed, in Hong Kong. ing his time overseas. “You value diver- McDonagh now oversees one of the top It was quite an experience. sity, you value, and you recognize, the 10 financial services organizations in the “We had a very large cash department. richness that each people can bring.” United States, with assets totaling $557 It was like mini Fort Knox, and I was the Back in London, he was soon on the billion and over 40,000 employees. operations manager.” move again, taking over the company’s The journey to the top was one that Soon after arriving in Brunei, offshore operations in the Channel would include living in eight different McDonagh met Kenane, an English Islands before going back to London and countries and developing deep cultural nurse and midwife, who would become joining the global headquarters staff. 36 IRISH AMERICA AUGUST / SEPTEMBER 2008 IA.34-37.qxd 7/10/08 4:03 PM Page 37 He made it to head of strategy there If you’ve before the call to come to the U.S. came. “ He was sent over to run the retail and got good ideas commercial banking side of the U.S. coming from business, which was based in Buffalo, New York. Soon he was made COO of your team, try the banking operation. Then HSBC acquired Household not to stop Finance, one of the largest subprime them.Your job mortgage lenders, but also one of America’s largest credit card companies. is to manage When the company began suffering the bright under the subprime mortgage deluge, the search for a topnotch executive ended at people McDonagh’s desk. around you McDonagh moved to Chicago to become CEO of HSBC Finance and to and be deal with the subprime crisis, which he comfortable has done successfully.