'When I arrived in Hong Kong 28 years ago, it was a vibrant city which was full of the smell and sounds of Asia. Today, it has a multinational feel and not just Asian. This is part of its prosperity and success,' Mr Smith says.

Mr Smith's feeling about the changes that have taken place in Hong Kong over the years also reflects the changes at HSBC.

In 1978, the same year China started to open its doors to the world, Hong Kong was a much smaller city, and HSBC's focus was limited to the region.

Today, the territory is an international financial centre used by investors around the world as a gateway to China, and HSBC has gone from being a 'made in Hong Kong' local brand to an international banking powerhouse.

After a string of spectacular acquisitions, HSBC now serves more than 110 million customers in 80 countries. Its first big buy was Midland Bank in 1992, followed by Republic New York in 1999, CCF of France in 2000, and the biggest deal by far - United States bank Household International in 2003 for US$15 billion.

The bank seems to be following the same strategy in China, where it has spent US$5 billion on acquisitions and expansion. This includes buying 19.9 per cent stakes in Ping An Insurance and Bank of Communications and owning 49 per cent of fund house HSBC Jintrust. Add to these its 10 bank branches, and HSBC is the largest foreign bank in the mainland.

The rewards in China have been bountiful, with profit growth from mainland operations surging more than tenfold to US$334 million last year. The contribution helped boost the group's net profit 17 per cent to US$15.08 billion.

While Hong Kong has lost its position as the largest profit contributor to the group, ranking third after the US and Europe, Mr Smith is quick to defend the city's role.

'Hong Kong is the root and heart of HSBC, which is now one of the largest banks in the world. The US and Europe are sizeable markets so it is natural to see them contributing a lot of profit. Hong Kong is a small place and it is extraordinary to see such a small place can contribute such significant value to the bank,' he says.

It was the prospect of working at an international bank that attracted Mr Smith to HSBC in 1978 after graduating with honours from London's City University, where he read economics.

'I thought it would be interesting to work in an international bank and I applied to a number of American banks and HSBC. HSBC was the first offer to come along and I happily accepted it.'

In the years since then, Mr Smith has stayed loyal and rejected many offers to jump ship. 'I am proud of my work and achievements at HSBC,' he says.

The bank has been his home away from home, a place where he learned the banking skills he honed to climb to its very top and work and live in many countries.

While some analysts are tipping him as a potential future chairman of the group, Mr Smith would not be drawn. 'I would be delighted if that was the case, but you would have to ask the present chairman. Also, within the group, there are so many very capable people that there are many candidates that could be considered.'

Fellow bankers describe Mr Smith as a low-profile hard worker, ready to pack up and slip into a different culture and working team wherever he may be posted.

'The key to HSBC's success as an international bank is that it has a team of international managers, such as Mr Smith, who can fit into any position in any part of the world,' says one.

Mr Smith's postings have included the Solomon Islands, the Middle East, Australia, South America, Malaysia and Britain.

He says his experiences could fill many books, if only he had the time to write them.

Mr Smith says the key to successfully making adjustments to different cultures is recognition that there is no single right way to do things. 'People in different countries have different cultures and do things differently,' he says.

One experience that catapulted Mr Smith into the news during one of his postings is an episode he is reluctant to talk about. In 2000, he was shot during an attempted kidnapping when he was chairman of HSBC's Argentina business.

Despite the terrifying experience, Mr Smith has no complaints about taking on jobs around the world even though he says security may be a problem in some countries.

He is keen to put the kidnap attempt behind him, and says he would rather write a book about Argentina's economic boom and collapse in 2001.

Of all the cities to which he has been posted, Mr Smith ranks Hong Kong as his favourite.

'I love Hong Kong. It is the best place in the world to work and live. Some Hong Kong people do not understand the real value of what they have. Everything here is so efficient. The city's energy and pace is second to none. It is a brilliant place,' he said.

While Mr Smith's love for Hong Kong has not changed, not all Hong Kong people have reciprocal feelings towards HSBC and other banks.

Many local banks have been criticised for shutting down unprofitable branches in some poor districts, making life difficult for elderly residents who have to travel much further to do their banking.

Mr Smith says: 'HSBC is aware of our social responsibility.'

He insists that HSBC makes every effort to provide services for most people in the city. 'In the last few years, HSBC has increased space in branches available and increased the number of staff to serve customers.'

On the corporate governance side, concerns have been raised over a potential conflict of interest for Mr Smith being president and chief executive of Hongkong and Shanghai Banking Corp and at the same time being chairman of subsidiary Hang Seng Bank.

'HSBC has always let the two banks run their businesses independently,' he says.

'I understand that there are some concerns, but as long as you are taking care of shareholders' interests, there is little to complain about.'

Mr Smith has witnessed many changes in the banking industry over the years.

'Gone are the days when banks only received deposits and offered simple loan products. Customers now want a range of products such as insurance, fund and retirement products,' he says, adding that the youngsters who join the industry today face a much tougher environment than when he entered the businesses.

'The banking world is far more serious. Today, the young men and women have to work much harder. This means long hours in the office, 100 per cent commitment and huge pressure.'

Even though his staff say he is a demanding boss who expects the highest quality of work, Mr Smith does have a soft side. He supports a proposal for a five-day working week, instead of the 5? days that bank staff currently put in.

'I support a five-day week because I believe it is important to have a balance between life and work - even though I do not think I could work five days a week myself,' he chuckles.

With a wife and three children, Mr Smith has a sense of the importance of family. But he has not pushed any of his children to follow in his footsteps. 'I want them to be happy,' he says.

'They should do whatever they want to do. I provide the best education for them. If they want to join the banking sector, I will not stop them. But it is up to them to make a choice.'

Away from banking, Mr Smith's wide range of interests include viticulture, golf, classic cars, art and antiques.

The family has a property in France, where he wants to grow a vineyard.

'It is not for business but for interest. I love the whole process and atmosphere of winemaking. It is beautiful and I think the culture of winemaking is wonderful,' he says.

'I may have my own label at some stage in the future.'

Biography

Michael Smith was appointed president and chief executive of the Hongkong and Shanghai Banking Corp in January 2004, simultaneously becoming chairman of HSBC Bank Malaysia and a director of HSBC Bank Australia.

He was named chairman of Hang Seng Bank in April last year and took the role as global head of commercial banking for the HSBC Group.

Graduating in 1978 with honours from City University, London, where he read economics, he joined HSBC the same year, going on to hold a range of positions in Hong Kong, the Asia-Pacific region, Britain, Australasia, the Middle East and South America, including appointments in commercial, institutional and investment banking, planning and strategy, operations and general management.

He was made a fellow of the Hong Kong Management Association last year.

Mr Smith is married with three children. His interests include viticulture, golf, classic cars, art and antiques.

To listen to Mr Smith tell his story, please visit our website at podcasting.scmp.com

'Hong Kong is the best place in the world. Its energy and pace are second to none'