Republic New York Corp.'s two highest-ranking executives have not been offered management posts in the new banking company that is to be created by the merger this month with HSBC Holdings Inc.

The London-based banking company's $9.9 billion acquisition of Republic - to create HSBC USA Inc. - is slated to close Dec. 31.

Dov C. Schlein, Republic's chairman and chief executive officer, and Stephen J. Saali, president, will stay on as consultants to the new company at least through the integration process but will take on no formal management roles, according to a statement from HSBC. Mr. Schlein, 51, and Mr. Saali, 35, took the helm at Republic in April after the retirement of chairman Walter H. Weiner.

Observers said they were surprised that the two were not invited into the new company's management ranks, but a Republic insider said Republic and HSBC would have almost equal representation within the management ranks of HSBC USA.

Mr. Schlein and Mr. Saali were offered five-year employment contracts as consultants. Mr. Schlein was guaranteed 1999 compensation of at least $2.25 million, and Mr. Saali was guaranteed at least $2 million, including a one-time merger bonus. Annual compensation thereafter is to be at least $1 million for each.

HSBC said the merged company would draw senior managers from Republic's private banking unit.

Leslie Bains, executive vice president of Republic's U.S. private bank, will become senior executive vice president overseeing the same unit of the new company. Elias Saal, vice chairman of Republic, will become senior executive vice president overseeing the new company's treasury and international private banking operations.

Observers had feared that Republic's treasure trove of private-client business might be hurt following the death of Republic's founder, Edmond Safra. HSBC appears to be mitigating this concern by keeping Republic's private banking executives in place. Bolstering its private banking business was one of HSBC's major motivations for acquiring Republic in the first place.

In other areas, Republic also has representation. Vice chairman Vito Portera is to become senior executive vice president in charge of HSBC USA's corporate banking operations. George Wendler, also a vice chairman, will become senior credit officer. Paul Lee will keep his general counsel title.

From HSBC, Rob Muth is to become senior executive vice president for operations, information technology, e-commerce, marketing, and other staff functions. Iain Stewart, who will continue to be chairman of HSBC Securities, will also oversee the new company's investment banking and capital markets operations in the Americas.

HSBC USA Inc. will be based in New York, but its main operating subsidiary, HSBC Bank USA, will be based in Buffalo. HSBC Bank would have more than $34 billion of deposits and 457 branches, though as many as 20 overlapping sites may ultimately be sold. It would become the third-largest deposit institution in New York City.

Republic's shareholders and the Federal Reserve Board approved the deal this month after a drawn-out proxy period. The merger was delayed for at least two months after Republic disclosed that its securities unit was being examined for its relationship with a Princeton, N.J.-based investment manager accused of bilking as much as $500 million from Japanese investors.

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