HSBC Holdings plc

THE SCOOP

The big one


HSBC Holdings is one of the largest financial services firms in the world.  Headquartered in London, the global banking group has about 9,500 and more than 310,000 employees throughout Europe, North and South America, Asia, Africa and the Middle East.

HSBC was established as the international and uniform brand name in order to better promote the banking group as a whole in 1999.  However, with a truly international presence and established local presence in so many countries, HSBC took its internationalism a step further in 2002 by marketing itself as "the world's local bank," an approach that's still taken by the firm.

HSBC's largest and most-recognised subsidiaries include HSBC Bank plc in the UK, HSBC France, Hang Sent Bank Limited in Hong Kong, Household International and HSBC Bank USA N.A. in the United States, and HSBC Private Banking Holdings (Suisse) S.A. in Switzerland, Hong Kong SAR, Monaco, Luxembourg, Singapore, the Channel Islands and the UK.

In addition to being known throughout the world for its size, HSBC has also earned a reputation for being a well-run organisation.  While many other large banking groups have struggled in the midst of the worldwide financial crisis that began in 2007, HSBC has remained relatively (though not completely) unscathed.  It has not had to take any government bailout money, remaining one of the better capitalised banks in the world.

A storied history

HSBC's origins stretch back to the mid-19th Century, when Thomas Sutherland, the Hong Kong Superintendent of the Peninsular and the Oriental Steam Navigation Company identified a need for local banking branches both in Hong Kong and along the Chinese coast. The Hong Kong and Shanghai Banking Corporation Limited was founded in 1865, and opened offices in both Shanghai and London. And, over the coming decades and then century, the bank opened branches throughout China, Southeast Asia, and the Indian subcontinent, also further expanding in Europe and North America.

Almost a century into its existence, in 1959 the Hong Kong and Shanghai Banking Corporation acquired the British Bank of the Middle East, which was originally known as the Imperial Bank of Persia and had a number of operations in the Gulf Arab states, as well as the Mercantile Bank, which had banking operations in India and South East Asia. In 1965, six years after purchasing the two banks, the Hong Kong and Shanghai Banking Corporation bought a controlling interest in the Hang Seng Bank, which had already been based in Hong Kong since 1933.

Through the rest of the 1960s, 1970s, and 1980s, the now banking giant continued its proven-successful strategy of moving into new markets. In 1981, it established the Hong Kong Bank of Canada, and in 1986, established the Hong Kong Bank of Australia. The following year in the USA, in 1987, the Hong Kong and Shanghai Bank holdings acquired the New York-based Marine Midland bank, further strengthening the massive group's US operations. By this point the group had a global constellation of operations which really needed to sit unified under one umbrella. In 1991, the international 'constellation' of banks and companies owned by Hong Kong and Shanghai Bank were brought together under the single ownership and control of the newly created umbrella banking holding company HSBC Holdings, under which business and operations have remained since.

True to its word

 

One month after HSBC told the world that its focus on Asian (as well as Middle Eastern and European) markets would keep it afloat in troubling economic times, the firm was deemed the successful bidder in a government auction to acquire The Chinese Bank in Taiwan. The bank, of which the Taiwan government has had control since January 2007, had US$3.1 billion in assets as of September 2007. HSBC assumed the bank's assets and liabilities in exchange for Taiwanese government funds, which reportedly amount to US$1.5 billion. In addition, HSBC will provide additional capital, estimated to be between US$300 million and US$400 million.

 

Reporting on HSBC's acquisition, The New York Times said, "HSBC, which followed global rivals Citigroup, Standard Chartered and ABN AMRO to acquire a Taiwan bank, will focus on expanding two competitive but profitable businesses: wealth management and small-medium enterprises investing in China." Under the terms of the deal, HSBC is required to establish a local subsidiary within three years of completion or one year after HSBC's total assets in Taiwan exceed US$13.9 billion, whichever is earlier. The new company will have a minimum capitalization of approximately US$309 million.

 

Greenest of them all

 

In the midst of subprime misery, HSBC received a feel-good honor in January 2008, when it was marked as the top-ranked environmentally conscious bank. The firm nudged out ABN Amro, Barclays, HBOS and Deutsche Bank, as well as U.S. powerhouses Citi and Bank of America. The ranking was performed by Ceres, an environmental group that urges companies to address climate change. HSBC has been carbon neutral since 2005.

 

Previously, in May 2007, HSBC had spearheaded a five-year, US$100 million partnership to respond to the urgent threat of climate change worldwide. The firm was joined in the coalition by The Climate Group, Earthwatch Institute, Smithsonian Tropical Research Institute and WWF. The partnership-which involved the largest donations to each of these charities and the largest donation ever made by a British company- has significant program targets and offers transformational support for the environmental charities. The donation will help to deliver increased capacity, help the charities to expand across new countries and research sites, and increase their access to more people.

 

Profits halved

 

Having witnessed one of the worst downturns in the global economy since before World War II, HSBC was lucky to come out with what on the surface appeared to be pretty healthy profits of $9.3 billion before tax for 2008. Put into context, however, these profits were 62 percent lower than 2007 figures. But the bank can hold its head high that it did not have to rely on government handouts to stay afloat. And while pretax profit was down in North America by a whopping 169 per cent, in Asia and in Hong Kong, profits were up. By the end of fiscal 2008, operations in Hong Kong reported profits that were 58 percent higher versus 2007 figures to US$5.5 billion, while the rest of Asia posted profits of US$6.5 billion, 69.5 percent higher than the previous year.

 

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HSBC Holdings plc


8 Canada Square
London E14 5HQ
Phone: +44 (0)207 991 8888
www.hsbc.com

STATS


  • Employer Type: Public
  • Stock Symbol: HSBA
  • Stock Exchange: LSE
  • Group Chief Executive: Michael F. Geoghegan
  • 2010 Employees: 287,571

Major Office Locations

  • London, United Kingdom

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