Job Title: International Manager
Location: UK
Submitted on: 22-Mar-05
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Business Outlook
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| International Manager |
HSBC is the second only to Citigroup in market capitalization. It has the
scale and reach to push forward in its diverse business areas (customer
groups). In particular, Islamic banking (HSBC Amanah) and consumer
finance (HSBC Finance) will be important areas for the group. HSBC is a
leader in underwriting global Islamic bond issues and is investing
heavily in widely distributing Islamic banking products. The consumer
finance business is being positioned for Japan and other markets where
large amounts of consumer credit information is available. It was the
growth potential of this business that prompted HSBC to buy Household two
years ago.
In terms of competition, HSBC competes against local banks in various
countries and also with the international firms like Citi and Standard
Charatered. In countries where regulations prevent it from increasing in
scale, the bank focusses on niche, high-end markets. Its "Premier"
service provides personalized, relationship based banking for high
net-worth customers. This is a profitable business and is rapidly
attracting many such customers. In Hong Kong, HSBC dominates banking.
Two-thirds of those in Hong Kong bank with HSBC or its group member, Hang
Seng. HSBC is the de facto central bank in Hong Kong, advising the
Monetary Authority there on policies.
HSBC is characteristically conservative. Risks are carefully weighted in
to its lending practises, probably more so that its competitors. However
this has served the bank well. It has avoided the aggressive tactics of
the likes of Citi and JP Morgan and in doing so has kept itself
relatively clean of controversies. When HSBC bought Household, there was
an outcry over the pay of then CEO, Bill Aldinger. The $37 million
package did not go well with the bank's conservative line. However,
Aldinger retired earlier than expected having completed Household's
integration with HSBC and this is being seen positively by shareholders.
HSBC's conservative streak is also reason for its weakness in its
investment banking division. The aggressive nature of the business did
not quite go well with the bank's culture. So although investment banking
makes up a third of its income, HSBC does not figure among the top of the
league tables. Having said this, there are changes in motion. HSBC is
growing in stance in debt issues and is becoming more aggressive in its
advisory practise.
The bank is now moving to leverage its scale and diversity to further
grow in its markets. There is unrealized potential in cross-selling its
diverse services among its large customer base. HSBC does have great
potential.
On the employment front, the bank's diversity in numerous countries makes
it difficult to define morale. In Hong Kong, its large presence gives a
different feel compared to say New Zealand. Hong Kong is almost a
definite posting for IMs.
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