Marine Midland CEO Quits; Officer from Parent Named
NEW YORK - Geoffrey A. Thompson resigned Thursday as president and chief executive officer of Marine Midland Banks Inc.
Mr. Thompson, 50, who had been chief executive since 1988, submitted his resignation from the bank and its holding company at a board meeting. The board appointed John R.H. Bond, a 30-year veteran of Hongkong and Shanghai Banking Corp., to replace him.
Mr. Bond had been executive director of Hongkong Group's North American operations from 1987 to 1990. The Hongkong and Shanghai Bank and Marine are both subsidiaries of HSBC Holdings.
Mr. Thompson did not return calls for comment. Patricia Coate, a Marine Midland spokeswoman, said that he resigned to pursue other interests.
Declining Profits
In the three years since Mr. Thompson took the reins of Buffalo-based Marine Midland, the company's profitability has rapidly deteriorated.
The holding company, the 36th largest in the U.S. at year-end 1990 and second largest owned by a foreign organization, lost $295.6 million last year and $72.3 million in the first quarter of this year, after earning $160.5 million in 1988 and $13.9 million in 1989.
Although Marine's problems are related in large degree to the widespread decline of real estate in the Northeast, Mr. Thompson has been criticized internally for weak leadership.
"I don't think anybody would be surprised by his leaving," said a former Marine official who asked for anonymity. "Eventually, something has to give at the top. Willie Purvis [chairman of the Hong Kong-based parent] has a lot of patience, but it only goes so far."
Help from Parent
The parent company infused $300 million into Marine last year, signed agreements with regulators to maintain its capital ratios, and is expected to add several hundred million dollars more in capital this year.
Asked at a Salomon Brothers conference last April how much more pain the Hongkong Group can endure from Marine, George Cardona, manager of the group head office, replied: "I'm not sure you can measure the pain you can take. But I'm also not sure there are a lot of choices. We made an agreement to maintain Marine's capital."
Marine shed $7.7 billion of assets last year, about half of which were absorbed, with some pain, by the parent. Assets at the end of the first quarter were down to $19.4 billion from $20.1 billion at yearend.
Mr. Thompson recently told a group of investors that Marine transferred almost $600 million of construction and mortgage loans to its parent in last year's fourth quarter.
Mr. Thompson, an imposing six feet, six inches tall, had an impressive career at the company, which for many years operated jointly out of Manhattan and Buffalo. After joining Marine in 1981, he was named head of its consumer business in 1982 and president and chief operating officer in 1986. He was promoted to chief executive in 1988.
During the 1970s, he worked for six years at Citibank, a stint sandwiched between positions as circulation director at Newsweek International and as a vice president at General Electric Credit Corp.
Shortly after his appointment to Marine's top post, Mr. Thompson was mentioned as a candidate to one day succeed Mr. Purvis at the helm of the Hong Kong-managed, London-incorporated global giant. His aristocratic demeanor and ability to work smoothly with his British bosses were considered advantages. But troops in the United States have criticized him for ineffective leadership on a day-to-day basis.
Through most of his tenure, the Hong Kong parent followed a hands-off approach that in good times earned it plaudits. In the past two years, however, Hongkong has forced Marine to shed assets, abandon its ambitions to achieve money-center status for a focus on retail banking in western New York, and slashed its payroll.
Marine has also suffered a setback in its upstate retail strongholds, where two rivals - Key-Corp and First Empire State Corp. - have surpassed its market share after acquiring deposits of failed thrifts.
In the past six months, the Hongkong banking unit moved its own staffers into senior administrative and credit positions at Marine. In addition, direct control of real estate, credit policy, sovereign risk, and global securities products went directly to Keith Whitson, an executive imported from Hong Kong a year ago to replace Mr. Bond.
The parent also stamped its imprint on New York with other measures. Recently, it mandated that New York employees watch a monthly videotape of news from various Hongkong Group units around the world.
"Any financial institution that shows losses quarter after quarter has to look at the possibility of changes at the senior management level," said Anthony Lord, a partner at Johnson Smith & Knisely, an executive search firm. "Any change at an institution like Marine would not come as a surprise to the market."
