HSBC BANK PLC

DATE: Sep, 9   COMMENTS: 0   AUTHOR: Allan Azarola

HSBC is a multinational service holding company and investment bank. By 2018, it was the world’s 7th largest bank, the largest bank in Europe. The present form of HSBC bank was established in London in 1991 by the Hong Kong and Shanghai Banking Corporation, while its origin is derived from a hong in British Hong Kong. It was formally incorporated first in 1865 when the Hong Kong and Shanghai Banking Corporation launched its branches in Shanghai. 

HSBC is classified into 4 business groups:

  • Commercial banking
  • Global private banking
  • Global banking and markets
  • Retail banking and wealth management

It has a dual primary listing on London Stock Exchange and Hong Kong Stock Exchange. It is also a component of the FTSE 100 Index and Hang Seng Index.

HISTORY:

HSBC bank was founded in British Hong Kong by Scotsman Thomas Sutherland on March 3rd, 1865. A month later, it was opened in Shanghai. The ordinance of the Hong Kong Legislative Council formerly incorporated it as HSBC on August 14th, 1866.

By 1880, HSBC acquired a shareholding of 51% Marine Midland Bank of the United States. In 1987, HSBC extended to the full ownership of the Marine Midland bank. On October 6th, 1989, amended its original governing ordinance and renamed it to The Hongkong and Shanghai Banking Corporation Limited. At this time, HSBC was registered as a regulated bank with the Banking Commissioner of the Government of Hong Kong.

On March 25th, 1991, HSBC completed its transformation into the parent holding company to the HSBC Limited. In 1993, HSBC had acquired the Midland bank’s holdings and the headquarters were relocated from Hong Kong to London.

In May 1999, HSBC purchased the New York Republic National Bank for $10.3 which expanded its presence in the US.

Between 2000 and 2008, HSBC purchased several banks and acquisitions to expanded its presence. In 2005, it was accused of drug dealings and money laundering as well as being state sponsors of terrorism by Bloomberg markets magazine.

In March 2009, HSBC revealed that it had generated a profit of $9.3 billion in 2008 and announced a £12.5 billion rights issue so that it may buy other struggling banks that were striving to survive.

On May 11th, 2013, the new CEO announced that a large-scale retrenchment of operations specified in the sector of retail, was planned and that HSBC would refocus its business strategy.

In June 2014, HSBC Life (UK) Limited sold its UK pensions business worth £4.2 to Swiss Re. 

In August 2015, HSBC sold its Brazilian unit worth $5.2 to Banco Bradesco because of the years of disappointing performance. In the same year, HSBC was accepted as the most trusted foreign bank by The Brand Trust Report 2015 of India.

In 2016, HSBC bank was repeatedly mentioned related to the Panama Papers investigation.

In May 2016, HSBC decided to reduce its presence in India to only fourteen cities, therefore, it shut down its 24 of 50 branches in the country.

In March 2017, HSBC was accused to be involved with launder KGB-related funds by the British newspaper, The Guardian. This investigation was named Global Laundromat and HSBC was among the 17 banks that we’re accountable to what they knew about the international scheme

In October 2017, Douglas Flint was succeeded by Mark tucker as HSBC Group Chairman. He was the first outside and non-executive chairman appointed for the group. In February 2018, John Flint succeeded Stuart Gulliver as chief executive of the retail banking and wealth management.

In February 2020, HSBC decided to cut 35,000 jobs all over the world after its corporate profits decreased by 33% in 2019.

MAIN DIVISIONS AND BUSINESS GROUPS:

HSBC is classified into four major business groups. These groups are discussed below:

  • Commercial banking:

HSBC serves small, medium, and middle-market enterprises. Commercial banking of HSBC has above 2 million customers including clubs and associations, partnerships, and sole proprietors. In December 2015, Simon Cooper the then CEO of HSBC left the bank to avail other opportunities, while Noel Quinn succeeded him as the CEO of commercial banking.

  • Global banking and markets:

The investment banking arm of HSBC, global banking and markets provide financing products and investment banking for institutional and corporate clients, including investment banking, corporate banking, trade services, capital markets, cash and payment management, as well as leveraged acquisition finance.

Global banking and markets provide services in equities, foreign exchange credit and rates, securities services and money markets as well as asset management services. It has offices in 60 or more territories and countries all over the world. it describes itself as financing-focused and emerging markets-led service. The main lead of the Global Banking and Markets sector of HSBC is Samir Assaf, who was appointed on December 10th, 2010.

  • Global private banking:

The principal private subsidiaries of HSBC conduct the private banking business under the marketing name HSBC private bank all over the world. HSBC private banking is the collective name for HSBC private bank and HSBC Trinkaus. It provides services to the families of high-net-worth individuals in 42 countries through 93 locations in Europe, the Americas, Africa, the Asia-Pacific, and the Middle East.

From January 2019, Antonio Simoes replaced Peter Boyles as the CEO of global private banking and Peter Boyles decided to retire from the bank at the age of 43. 

  • Retail banking and wealth management:

HSBC provides a full range of financial services for personal purposes including mortgage loans, current and savings accounts, insurance, car financing, credit cards, pensions, loans, and investments to more than 54 million customers. Retail banking and wealth management was previously known as Personal Financing Services.

CONCLUSION:

HSBC bank falls among the largest and most trusted banks in the world. Initially, it was the combination of Hong Kong and Shanghai Banking Corporation, but later it acquired more banks and expanded its presence all over the world in different territories and countries. HSBC is principally classified into 4 areas, that operate all over the world within different populations and fulfill the needs of every individual in a respected manner.

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