HSBC
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| Type | Public limited company LSE: HSBA SEHK: 005 NYSE: HBC Euronext: HSB BSX: 1077223879 |
|---|---|
| Industry | Banking Financial services Investment services |
| Founded | 1991[1] (HSBC Holdings plc) 1865[2] (The Hongkong and Shanghai Banking Corporation Limited) |
| Headquarters | 8 Canada Square London, United Kingdom[3] |
| Number of locations | 8,000 offices in 87 countries & territories[4] |
| Area served | Worldwide |
| Key people | Stephen Green (Group Chairman) Michael Geoghegan (Group CEO) |
| Products | Finance and insurance Consumer Banking Corporate Banking Investment Banking Investment Management Global Wealth Management Private Equity Mortgages Credit Cards |
| Revenue |  $103.74 billion (2009)[5] |
| Operating income | $7.079 billion (2009)[5] |
| Profit | $5.834 billion (2009)[5] |
| Total assets | $2.418 trillion (at 30 June 2010)[6] |
| Total equity |  $128.299 billion (2009)[5] |
| Employees | 302,000 (2009)[5] |
| Subsidiaries | HSBC Bank plc HSBC GLT India The Hongkong and Shanghai Banking Corporation HSBC Bank USA HSBC Bank Middle East HSBC Mexico HSBC Bank Brazil HSBC Finance |
| Website | HSBC.com |
HSBC Holdings plc (滙豐控股有限公司) is a global financial services company headquartered in London, United Kingdom.[3] As of 2010, it is both the world's largest banking and financial services group and the world's 8th largest company according to a composite measure by Forbes magazine.[7][8] It has around 8,000 offices in 87 countries and territories in Africa, Asia, Europe, North America and South America and around 100 million customers.[4][9] As of 30 June 2010 it had total assets of $2.418 trillion, of which roughly half were in Europe, a quarter in the Americas and a quarter in Asia.[6]
HSBC Holdings plc was founded in 1991 by The Hongkong and Shanghai Banking Corporation to act as a new group holding company and to enable the acquisition of UK-based Midland Bank.[1] The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865.[2] Today HSBC remains the largest bank in Hong Kong, and recent acquisitions and expansion in mainland China are returning HSBC to that part of its roots.[10]
Its primary listing is on the London Stock Exchange and it is a constituent of the FTSE 100 Index. It has secondary listings on the Hong Kong Stock Exchange (where it is a constituent of the Hang Seng Index), New York Stock Exchange, Euronext Paris and Bermuda Stock Exchange. As of August 2010, it was the largest company listed on the London Stock Exchange, with a market capitalisation of £115.8 billion.[11]
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History
Development of the bank
HSBC (acronym origin: the "Hongkong and Shanghai Banking Corporation") was founded in the former British colony Hong Kong (in March 1865) and Shanghai (one month later) by Scotsman Sir Thomas Sutherland (1834-1922). HSBC Holdings plc established in 1990 became the parent company to The Hongkong and Shanghai Banking Corporation in preparation for its purchase of Midland Bank in the United Kingdom and restructuring of ownership domicile for the impending transfer of sovereignty of Hong Kong to China. HSBC Holdings acquisition of Midland Bank gave HSBC Group a substantial market presence in the United Kingdom which was completed in 1992. As part of the takeover conditions for the purchase of Midland Bank, HSBC Holdings plc was required to relocate its world headquarters from Hong Kong to London in 1993.
Major acquisitions in South America started with the purchase of Banco Bamerindus of Brazil for $1bn in March 1997[12] and the acquisition of Roberts SA de Inversiones of Argentina for $600m in May 1997.[13]
In May 1999 HSBC embarked on a major acquisition in the United States with the purchase of Republic National Bank of New York for $10.3bn.[14]
Expansion into Continental Europe took place in April 2000 with the acquisition of Crédit Commercial de France, a large French bank for £6.6bn.[15]
In July 2001 HSBC bought Demirbank, an insolvent Turkish bank.[16] Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third largest retail bank for $1.1bn.[17]
The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in April 2003.[18]
Then in September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m.[19]
In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai.[20]
In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for £763m in December 2004.[21]
Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August[22] and 70.1% of Dar Es Salaam Investment Bank of Iraq in October.[23]
In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m.[24]
In December 2007 HSBC acquired The Chinese Bank in Taiwan.[25]
In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm.[26]
Subprime crisis
In November 2002 HSBC expanded further in the United States. Under the chairmanship of Sir John Bond, it spent £9bn (US$15.5bn) to acquire Household Finance Corporation (HFC), a US credit card issuer and subprime lender.[27] In a 2003 cover story, The Banker noted "when banking historians look back, they may conclude that [it] was the deal of the first decade of the 21st century".[28] Under the new name of HSBC Finance, the division was the second largest subprime lender in the US.[29]
In March 2009, HSBC announced that it would shut down the branch network of its HSBC Finance arm in the U.S., leading to nearly 6,000 job losses and leaving only the credit card business to continue operating.[30][31]
Chairman Stephen Green stated, "HSBC has a reputation for telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not undertaken."[32]; analyst Colin Morton said, "the takeover was an absolute disaster".[31][33]
Although it was at the centre of the subprime storm, the wider group has weathered the economic crisis better than other global banks. According to Bloomberg, "HSBC is one of world’s strongest banks by some measures."[34] When HM Treasury required all UK banks to increase their capital in October 2007, the group transferred £750 million to London within hours, and announced that it had just lent £4 billion to other UK banks.[35] In March 2009, it announced that it had made US$9.3bn of profit in 2008 and announced a £12.5bn (US$17.7bn; HK$138bn) rights issue to enable it to buy other banks that were struggling to survive.[36] However, uncertainty over the rights' issue's implications for institutional investors caused volatility in the Hong Kong stock market: on 9 March 2009 HSBC's share price fell 24.14%, with 12 million shares sold in the last few seconds of trading.[37]
Operations
Corporate profile
In February 2008, HSBC was named the world's most valuable banking brand by The Banker magazine.[38][39] Not known for marked fluctuations in securities exchanges around the world relative to its rivals, HSBC is more well known in banking circles for its conservative and risk-averse approach in its business operations - a company tradition going back to the 19th century.[40] In its technical management, however, HSBC has recently suffered a series of headline-making incidents in which some customer data were allegedly leaked or simply went missing. Although the consequences turned out to be small, the embarrassing effect on the group's image did not go unnoticed.[41]
As of April 2, 2008, according to Forbes magazine, HSBC was the fourth largest bank in the world in terms of assets ($2,348.98 billion), the second largest in terms of sales ($146.50 billion), the largest in terms of market value ($180.81 billion). It was also the most profitable bank in the world with $19.13 billion in net income in 2007 (compared to Citigroup's $3.62 billion and Bank of America's $14.98 billion in the same period).[42]
HSBC is by far the largest bank both in the United Kingdom and in Hong Kong and prints most of Hong Kong's local currency in its own name. Since the end of 2005, HSBC has been rated the largest banking group in the world by Tier 1 capital.[43]
The HSBC Group has a significant presence in each of the world's major financial markets, with the Americas, Asia Pacific and Europe each representing around one third of the business. With 8,500 offices in 86 countries, 210,000 shareholders, 300,000 staff and 128 million customers worldwide, HSBC arguably has the most international presence among the world's multinational banking giants.
The HSBC Group operates as a number of local banks around the world, which explains its advertising tagline "The World's Local Bank." In response to ongoing discussions about the survival strategies for banks, and the suggestion of "Living Wills" HSBC explains its structure as "separately incorporated and capitalised" the structure is based on a lead bank in each region, which has responsibility for the group's operations in that area, as listed below.[44] For details of other group companies see Category:HSBC.
South America
· 
HSBC Bank Brazil SA, Banco Multiplo
· 
HSBC Bank Argentina SA
· 
HSBC Bank Peru SA
Asia Pacific
The Hongkong and Shanghai Banking Corporation Ltd
· Hang Seng Bank Ltd
· 
HSBC Bank (China) Company Ltd
· 
HSBC Bank Malaysia Berhad
Middle East
HSBC Bank Middle East Ltd
· 
HSBC Bank Egypt SAE
· 
The Saudi British Bank
North America
HSBC Bank USA Inc
· HSBC Finance Corporation
· 
HSBC Bank Canada
· 
HSBC Mexico SA
Europe
HSBC Bank plc
· 
HSBC France
· 
HSBC Trinkaus und Burkhardt AG
· HSBC Private Bank (UK) Ltd
· 
HSBC Bank Polska S.A.
· 
HSBC Bank A.Ş.
Global product lines and programmes
Group Service Centres
As a cost saving measure HSBC is offshoring processing work to lower cost economies in order to reduce the cost of providing services in developed countries. These locations take on work such as data processing and customer service, but also internal software engineering at Pune, Hyderabad (India), Vishakhapatnam (India), Kolkata (India), Guangzhou (China), and Curitiba (Brazil).
Chief Operating Officer Alan Jebson said in March 2005 that he would be very surprised if fewer than 25,000 people were working in the centres over the next three years: “I don’t have a precise target but I would be surprised if we had less than 15 (global service centres) in three years’ time.” He went on to say that each centre cost the bank from $20m to $30m to set up, but that for every job moved the bank saves about $20,000 (£10,400).[46]
Trade unions, particularly in the US and UK, blame these centres for job losses in developed countries, and also for the effective imposition of wage caps on their members.[46]
Currently, HSBC operates centres out of eight countries, including Brazil (Curitiba), The Czech Republic (Ostrava), India (Kolkata, Hyderabad, Bangalore, Visakhapatnam, Mumbai, Gurgaon and Pune), China (Shanghai, Guangzhou and Shenzhen), Malaysia (Kuala Lumpur), Poland (Krakow), Sri Lanka (Rajagiriya) and Philippines (Manila). The Malta trial for a UK high value call centre has resulted in a growing operation that country. An option under consideration is reported to be a processing centre in Vietnam to access the French skills of the population and therefore cut costs in the bank’s French operations.
On June 27, 2006, HSBC reported that a "small number" of customers had suffered from fraud totaling £233,000 after an employee at the Bangalore call centre supplied confidential customer information to fraudsters.[47]
HSBC Private Bank
HSBC Private Bank [48] is the group's private banking operation, providing private banking and trustee services to wealthy individuals and their families worldwide. The Private Bank has in excess of 60 offices worldwide, with the major centres being Miami, New York, London, Geneva and Hong Kong.
HSBC Premier
HSBC Premier[49] is the group's premium financial services product. The exact benefits and qualification criteria vary depending on country, but typically require deposits and investments of at least $100,000, £50,000, or €100,000. Alternatively those who have an individual annual income of at least £100,000 paid into their HSBC Premier Bank Account and are a customer of the bank's Independent Financial Advisory Service. Customers have a dedicated Premier Relationship Manager, global 24 hour access to call centres,free banking services and preferential rates. A HSBC Premier customer receives the HSBC Premier services in all countries that offer HSBC Premier, without having to meet that country's qualifying criteria.
HSBC Bank International
HSBC Bank International[50] is the offshore banking arm of the HSBC Group, focusing on providing offshore solutions and cross border services to expatriates and migrants. It provides a full range of multi-currency personal banking services to a range of customer segments, including a full internet banking and telephone banking service. Sometimes referred to as "HSBC Offshore", the business also offers independent financial planning, and has representative offices all over the world, often working alongside local HSBC operations in those regions.
HSBC Bank International originated from the business started by Midland Bank and is based in the Channel Islands with further operations on the Isle of Man. Its operations in the Channel Islands are centred around its registered headquarters on the seafront in St Helier, Jersey. Named 'HSBC House', the building comprises departments such as Premier, Global Funds & Investments, e-Business and a 24 hour 'Direct Banking Centre'.
HSBCnet
HSBCnet[51] is a global service that caters to local business needs by offering specialised functionality for different regions worldwide.
The system provides access to transaction banking functionality - ranging from payments and cash management to trade services features - as well as to research and analytical content from HSBC. It also includes foreign exchange and money markets trading functionality.
The system is used widely by HSBC's high-end corporate and institutional clients served variously by the bank's global banking and markets, commercial banking and global transaction banking divisions.
HSBCnet is also the brand under which HSBC markets its global e-commerce proposition to its corporate and institutional clients.
HFC Bank (UK Operation) is a wholly owned subsidiary, with 135 High Street branches in the UK selling loans to the "sub-prime" market. During 2007 and 2008, has been trying to fend off a union recognition campaign by the Trade Union Unite.
HSBC Direct
HSBC Direct is a telephone/online direct banking operation which attracts customers through mortgages, accounts and savings. It was first launched in the USA[52] in November 2005 and is now available in Britain, Canada,[53] Taiwan[54], South Korea[55] and France. Poland is launching business direct in September 2009.
Brand and advertising
The group announced in November 1999 that the HSBC brand and the hexagon symbol would be adopted as the unified brand in all the markets where HSBC operates, with the aim of enhancing recognition of the group and its values by customers, shareholders and staff throughout the world.
Logo
The hexagon symbol was originally adopted by The Hongkong and Shanghai Banking Corporation as its logo in 1983. It was developed from the bank’s house flag, a white rectangle divided diagonally to produce a red hourglass shape. Like many other Hong Kong company flags that originated in the 19th century, and because of its founder's nationality, the design was based on the cross of Saint Andrew. The logo was designed by graphic artist Henry Steiner.
Sponsorship
Having sponsored the Jaguar Racing Formula One team since the days of Stewart Grand Prix, HSBC ended its relationship with the sport when Red Bull purchased Jaguar Racing from Ford. HSBC has now switched its focus to golf, taking title sponsorship of events such as the HSBC World Match Play Championship, HSBC Women's World Match Play Championship (now defunct), HSBC Champions and HSBC Women's Champions.
In football HSBC sponsors French club AS Monaco and Mexican club C.F. Pachuca, and in rugby league, HSBC sponsors Telford Raiders in the Rugby League Conference. In Australia, HSBC sponsors the New South Wales Waratahs rugby team in the Super 14 rugby union competition, as well as the Hawthorn Football Club in the Australian Football League.
In the United States, HSBC owns the naming rights to the home arena of the National Hockey League's Buffalo Sabres until 2026.
HSBC’s other sponsorships are mainly in the area of education, health and the environment. In November 2006, HSBC announced a $5 million partnership with SOS Children as part of Future First.[56]
HSBC sponsors the Great Canadian Geography Challenge, which has had around 2 million participants in the past 12 years. Since 2001, HSBC has sponsored the Celebration of Light, an annual musical fireworks competition in Vancouver, British Columbia, Canada. In 2007 HSBC announced it would be a sponsor of the National Hockey League's Vancouver Canucks and Calgary Flames. HSBC has also sponsored a professional gaming team that was disbanded late 2007.
HSBC sponsored the 2009 British and Irish Lions tour to South Africa.[57]
HSBC is the official banking partner of the Wimbledon Tennis Championships, providing banking facilities on site and renaming the Road to Wimbledon junior event, as The HSBC Road to Wimbledon National 14 and Under Challenge.[58]
Customer groups
HSBC splits its business into four distinct groups:
Personal financial services
HSBC provides more than 100 million customers worldwide with a full range of personal financial services, including current and savings accounts, mortgage loans, car financing, insurance, credit cards, loans, pensions and investments.
Commercial banking
HSBC provides financial services to small, medium-sized and middle-market enterprises. The group has almost 2.5 million of such customers, including sole proprietors, partnerships, clubs and associations, incorporated businesses and publicly quoted companies.
Global banking and markets
Private banking
HSBC Private Bank is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank, together with the private banking activities of HSBC Trinkaus, known collectively as Group Private Banking, provides services to high net worth individuals and their families through 93 locations in some 42 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. As of December 2007, profits before tax were US$1,511 million and combined client assets under management were US$494 billion.
In September 2008, HSBC announced that it would combine its two Swiss private banks under one brand name in 2009, with HSBC Guyerzeller and HSBC Private Bank to be merged into one legal entity, under the newly appointed CEO of HSBC Private Bank, Alexandre Zeller.[59]
See also
- HSBC Buildings
- List of banks in the United Kingdom
- List of buildings and structures in Hong Kong
- Primary dealers
Notes
- ↑ 1.0 1.1 "Group history 1980-1999". HSBC Holdings plc. http://www.hsbc.com/1/2/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4o39DQGSYGYxqb6kShCBvGOCJEgfW99X4_83FT9AP2C3NCIckdHRQA4sRMO/delta/base64xml/L3dJdyEvd0ZNQUFzQUMvNElVRS82XzJfMUlT. Retrieved 4 September 2010.
- ↑ 2.0 2.1 "Group history 1865-1899". HSBC Holdings plc. http://www.hsbc.com/1/2/about/history/1865-1899. Retrieved 4 September 2010.
- ↑ 3.0 3.1 "Group Structure" HSBC website
- ↑ 4.0 4.1 "International network". HSBC Holdings plc. http://www.hsbc.com/1/2/about/network. Retrieved 4 September 2010.
- ↑ 5.0 5.1 5.2 5.3 5.4 "Annual Report 2009". HSBC. http://www.hsbc.com/1/PA_1_1_S5/content/assets/investor_relations/hsbc2009ara0.pdf. Retrieved 2010-03-13.
- ↑ 6.0 6.1 "Interim Report 2010". HSBC Holdings plc. http://www.hsbc.com/1/content/assets/investor_relations/hsbc2010ira0.pdf. Retrieved 4 September 2010.
- ↑ "Special Report - The Global 2000," Forbes, April 2, 2008.
- ↑ "HSBC tops Forbes 2000 list of world's largest companies," HSBC website, 4 April 2008
- ↑ "Annual Review 2009". HSBC Holdings plc. http://www.2009.annualreview.hsbc.com/annualreview/downloads/annual_review_2009.pdf. Retrieved 4 September 2010.
- ↑ Vidya Ram, "HSBC Gets Back In Touch With Its Roots" Forbes, 03.10.08
- ↑ "FTSE All-Share Index Ranking". stockchallenge.co.uk. http://www.stockchallenge.co.uk/ftse.php. Retrieved 2010-08-12.
- ↑ HSBC buys Bamerindus, Brazil Bank, for $1bn
- ↑ UK Business Park: HSBC
- ↑ Bank group to buy Republic New York
- ↑ HSBC leads the way into euro zone with £6.6bn french bank takeover
- ↑ HSBC buys insolvent Turkish bank
- ↑ HSBC buys Mexico's biggest retail bank
- ↑ HSBC HQ, Canary Wharf
- ↑ HSBC gets approval to buy Polish Bank
- ↑ HSBC buys stake in Chinese Bank
- ↑ M&S faces OFT inquiry into HSBC deal
- ↑ HSBC buys US credit card issuer Metris for $1.59bn
- ↑ HSBC closes in on Iraqi Bank
- ↑ HSBC acquires Banca Nazionale del Lavoro SA from BNP Paribas SA
- ↑ Taiwan gives HSBC £750m to take on Chinese Bank
- ↑ HSBC Buys 73.21 percent Stake in IL&FS
- ↑ HSBC pays £9bn for credit card group
- ↑ "Sir John Bond lays bare HSBC’s strategy for gaining ground"
- ↑ HSBC hates subprime, FT Alphaville
- ↑ HSBC bank closes its operations in the U.S.
- ↑ 31.0 31.1 Jon Menon, HSBC Rues Household Deal, Halts U.S. Subprime Lending, Bloomberg L.P. 2 March 2009.
- ↑ Neil Hume, Quote du jour - Stephen Green, FT Alphaville, 2 March 2009: "HSBC has a reputation for telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not undertaken."
- ↑ HSBC bank closes its operations in the U.S..
- ↑ Jon Menon 'HSBC to Raise $17.7 Billion as Subprime Cuts Profit', Bloomberg L.P., 2 March 2009
- ↑ Christine Seib 'HSBC quick to comply with refinancing demands', The Times, 10 October 2009.
- ↑ Benjamin Scent HSBC seeking to build `war chest', The Standard, 4 March 2009.
- ↑ Benjamin Scent 'Plunge probe' The Standard, 10 March 2009.
- ↑ "Hot Brands" The Banker, March 4, 2008
- ↑ Fast Facts HSBC Website, 4 April 2008
- ↑ Parmy Olson, "Better Safe Than Sorry" Forbes, 04.21.08
- ↑ "HSBC loses disk with policy details of 370,000 customers", The Guardian, April 8, 2008
- ↑ "The Global 2000" Forbes, April 2, 2008
- ↑ The world's biggest banks | Economist.com
- ↑ Presentation by Michael Geoghegan, on 29 September 2009 at the Bank of America Merrill Lynch Banking & Insurance CEO Conference in London
- ↑ "HSBC GLT frontpage". http://www.hsbcglt.com/. Retrieved 2008-08-22.
- ↑ 46.0 46.1 HSBC to offshore more jobs BBC News
- ↑ Man held in HSBC India scam probe BBC News
- ↑ HSBC Private Bank/
- ↑ HSBC Premier/
- ↑ HSBC Bank International Limited
- ↑ HSBCnet
- ↑ HSBC USA
- ↑ HSBC Canada
- ↑ HSBC Taiwan
- ↑ HSBC South Korea
- ↑ HSBC and SOS Children's Villages partnership
- ↑ Official British & Irish Lions site
- ↑ Wimbledon
- ↑ Press Clippings, HSBC Guyerzeller website
External links
- HSBC Group site
- HSBC Private Bank
- Guy Sayer HSBC chairman - Daily Telegraph obituary
- HSBC Bank Georgia site
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