HSBC

HSBC Holdings plc, 滙豐控股有限公司 is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. As of 2011, it was the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine. It has around 7,500 offices in 87 countries and territories across Africa, Asia, Europe, North America and South America and around 100 million customers. 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.

HSBC Holdings plc was founded in London 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. The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. Today, HSBC remains the largest bank in Hong Kong, and recent expansion in mainland China, where it is now the largest international bank, has returned it to that part of its roots.

HSBC is a universal bank and is organised within four business groups: Commercial Banking; Global Banking and Markets (investment banking); Personal Financial Services (retail banking); and Private Banking.

HSBC's 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), the New York Stock Exchange, Euronext Paris and the 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.

History of HSBC

History of the HSBC Group prior to the founding of HSBC Holdings in 1990, see The Hongkong and Shanghai Banking Corporation.

HSBC (abbreviation 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 the Banco Bamerindus of Brazil for $1bn in March 1997 and the acquisition of Roberts SA de Inversiones of Argentina for $600m in May 1997.

In 1980, HSBC acquired a 51% shareholding in Marine Midland Bank, which it extended to full ownership in 1987. In May 1999, HSBC continued its US acquisitions with the purchase of Republic National Bank of New York for $10.3bn.

Expansion into Continental Europe took place in April 2000 with the acquisition of Crédit Commercial de France, a large French bank for £6.6bn.

In July 2001 HSBC bought Demirbank, an insolvent Turkish bank. Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third largest retail bank for $1.1bn.

The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in April 2003.

Then in September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m.

In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai.

In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for £763m in December 2004.

Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August and 70.1% of Dar Es Salaam Investment Bank of Iraq in October.

In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m.

In December 2007 HSBC acquired The Chinese Bank in Taiwan.

In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm.

[edit]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. 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. Under the new name of HSBC Finance, the division was the second largest subprime lender in the US.

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.

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.; analyst Colin Morton said, "the takeover was an absolute disaster.

Although it was at the centre of the subprime storm, the wider group has weathered the financial crisis of 2007–2010 better than other global banks. According to Bloomberg, "HSBC is one of world’s strongest banks by some measures. 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. 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. 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.

HSBC Corporate profile

In February 2008, HSBC was named the world's most valuable banking brand by The Banker magazine. 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. 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.

As of 2 April 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) and 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).

HSBC is 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.

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 around 8,000 offices in 87 countries & territories, 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. For details of other group companies see Category:HSBC.

HSBCnet

HSBCnet 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, it has been trying to fend off a union recognition campaign by the Trade Union Unite.

HSBC Direct is a telephone/online direct banking operation which attracts customers through mortgages, accounts and savings. It was first launched in the USA in November 2005 and is now available in Britain, Canada, Taiwan, South Korea and France. Poland is launching business direct in September 2009. In the US, HSBC Direct is now part of HSBC Advance

HSBC layoffs: 30,000 jobs to be cut in global overhaul

HSBC has broken ranks with its rivals and released the lending commitments it made under the Project Merlin accord with the government to keep credit flowing to small businesses.

The bank, which employs 52,000 people in the UK, insisted it was on track to meet its share of the commitments to lend £44.1bn to businesses out of a total of £190bn promised by the banking industry in February. But in releasing the figures it also highlighted the confusion about the difference between "targets" agreed with the government and "capacity" above those targets.

Joe Garner, head of HSBC UK retail banking, now expects the other banks that signed up to the pact – Barclays, Royal Bank of Scotland and Lloyds Banking Group – to admit their portion of the total target agreed with the government.

In total HSBC has agreed to a "capacity" for lending of £44.1bn, and a "target" of £38.3bn. Halfway through the year, HSBC had lent £22.7bn of new facilities – which includes loans and overdrafts – to businesses overall, including £5.6bn out of a pledge of £11.7bn to small businesses.

"There is capacity for additional facilities of at least £1.2bn [to small businesses]," Garner said. On that measure, HSBC is behind on its commitments.

Garner published the data ahead of a scheduled update on the progress of Project Merlin from the Bank of England on 12 August.

From the outset Santander revealed how much it had promised to lend through Merlin because it refused to sign up to the bonus part of the pact with the government. Last week Santander said its stock of lending for small business was up 27% and gross lending – which adds up loans repaid and new ones granted – had reached £4bn, some £2.1bn of which was for small and medium sized enterprises.

The bank, which reported a better-than-expected 3 percent increase in pretax profits to $11.5 billion in the six months to June, has already cut 5,000 jobs this year. Another 25,000 will be slashed by 2013, spokesman Patrick Humphris said.

HSBC currently employs around 296,000 people worldwide.

Humphris declined to give details of where the job cuts would be but said the group is still hiring in emerging economies such as Brazil and Mexico.

The move echoes similar announcements by other global banks, such as Credit Suisse, UBS and Goldman Sachs, who in recent weeks said they needed to trim payrolls to adjust to tougher market conditions.

As part of its restructuring, HSBC will sell 195 retail banking branches in the United States to First Niagara Bank for around $1 billion. Most of the branches to be sold are in upstate New York, while six are in Connecticut. Four more are in northern Westchester County, and two in Putnam County.

The bank is still dealing with the legacy of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. The acquisition made HSBC the biggest subprime lender in the United States at the time, which resulted in billions of losses to HSBC leading up to the financial crisis of 2008.

"I am pleased with the results, which mark a first step in the right direction on what will be a long journey," New chief executive Stuart Gulliver said in a statement.

News of the bank's overhaul and its profit — earnings per share rose to 51 cents in the first half from 38 cents a year earlier, allowing for a 12.5 percent dividend increase to 18 cents — boosted the company's share price.

By midday in London, shares in HSBC Holdings PLC were up 4.4 percent at 619.40 pence (10.17).

Seymour Pierce analyst Bruce Packard said the pretax profit figures were about 6 per cent higher than forecast.

"These results look better than expected, underlining the attractions of HSBC's conservative balance sheet and developing markets business," he said.

Gulliver said in a statement that he expects financial markets worldwide to remain volatile this year and in 2012. He predicted growth in the U.S. and Europe would remain sluggish, weighed down by high debt levels and government budget cuts, but that Asia-Pacific and Latin American would continue to grow.