You are on page 1of 6

HSBC Holdings plc is a British multinational banking and financial services organisation headquartered in London, United Kingdom and

is one of the world's largest banks. It was founded in London in 1991 by The Hongkong and Shanghai Banking Corporation to act as a new group holding company[4][5] The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865.[1] The HSBC name is derived from the initials of The Hongkong and Shanghai Banking Corporation Limited.[2] It has around 7,200 offices in 85 countries and territories across Africa, Asia, Europe, North America and South America, and around 89 million customers.[6] As of 31 December 2012 it had total assets of $2.693 trillion, of which roughly half were in Europe, the Middle East and Africa, and a quarter each in Asia-Pacific and the Americas.[3] As of 2012, it was the world's largest bank in terms of assets and sixth-largest public company, according to a composite measure by Forbes magazine.[7] HSBC is organised within four business groups: Commercial Banking; Global Banking and Markets (investment banking); Retail Banking and Wealth Management; and Global Private Banking.[8] HSBC has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012 it had a market capitalisation of 102.7 billion, the second-largest company listed on the London Stock Exchange, after Royal Dutch Shell.[9] 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.

Contents

1 History o 1.1 Origins to 2000


o o

1.2 2000 to 2010 1.3 2010 to present

2 Operations
o o

2.1 Principal subsidiaries 2.2 Principal business groups and divisions

3 Global product lines


o o o o

3.1 HSBC Direct 3.2 HSBCnet 3.3 HSBC Advance 3.4 HSBC Premier

4 Logo 5 Sponsorships 6 Controversies


o

6.1 Money laundering

7 See also 8 References 9 External links

History
Origins to 2000
For more information on the history of HSBC prior to the founding of HSBC Holdings in 1991, see The Hongkong and Shanghai Banking Corporation. The HSBC Building in Shanghai, the headquarters of the Shanghai branch of The Hong Kong and Shanghai Banking Corporation from 1923 to 1955 The Hong Kong and Shanghai Banking Corporation was founded by Scotsman Sir Thomas Sutherland in the then British colony of Hong Kong on 3 March 1865, and in Shanghai one month later, benefiting from the start of trading into China, including opium trading. In 1980, HSBC acquired a 51% shareholding in US-based Marine Midland Bank, which it extended to full ownership in 1987. HSBC Holdings plc was established in the United Kingdom in 1991 as the parent company to The Hongkong and Shanghai Banking Corporation in preparation for its purchase of the UKbased Midland Bank and the impending transfer of sovereignty of Hong Kong to China. HSBC Holdings' acquisition of Midland Bank was completed in 1992 and gave HSBC a substantial market presence in the United Kingdom. As part of the takeover conditions for the acquisition, 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[10] and the acquisition of Roberts SA de Inversiones of Argentina for $600m in May 1997.[11] In May 1999, HSBC expanded its presence in the United States with the purchase of Republic National Bank of New York for $10.3bn.[12]

2000 to 2010
The HSBC Main Building in Hong Kong, which was designed by Norman Foster and completed in 1985

Expansion into Continental Europe took place in April 2000 with the acquisition of Crdit Commercial de France, a large French bank for 6.6bn. [13] In July 2001 HSBC bought Demirbank, an insolvent Turkish bank.[14] In July 2002, Arthur Andersen announced that HSBC USA, Inc., through a new subsidiary, Wealth and Tax Advisory Services USA Inc. (WTAS), would purchase a portion of Andersen's tax practice. The new HSBC Private Client Services Group would serve the wealth and tax advisory needs of high net worth individuals. Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third largest retail bank for $1.1bn.[15] In November 2002 HSBC expanded further in the United States. Under the chairmanship of Sir John Bond, it spent 9 billion (US$15.5 billion) to acquire Household Finance Corporation (HFC), a US credit card issuer and subprime lender.[16] 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". [17] Under the new name of HSBC Finance, the division was the second largest subprime lender in the US.[18] The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in April 2003.[19] In September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m. [20] In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai.[21] In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for 763m in December 2004.[22] Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August[23] and 70.1% of Dar es Salaam Investment Bank of Iraq in October.[24] In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m.[25] In December 2007 HSBC acquired The Chinese Bank in Taiwan. [26] In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm.[27] In 2005 Bloomberg Markets magazine accused HSBC of money-laundering for drug dealers and state sponsors of terrorism. Then-CEO Stephen Green said that This was a singular and wholly irresponsible attack on the banks international compliance procedures, but subsequent investigation indicated that it was accurate and proved that the bank was involved in money laundering throughout Mexico.[28] U.S. Assistant Attorney General Lanny Breuer characterised HSBC compliance during this period as "stunning failures of oversight and worse ... The record of dysfunction that prevailed at HSBC for many years was astonishing."[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] According to analyst Colin Morton, "the takeover was an absolute disaster".[31][33] Although it was at the centre of the subprime storm, the wider group has weathered the financial crisis of 20072010 better than other global banks. According to Bloomberg, "HSBC is one of worlds 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]

2010 to present
8 Canada Square, the world headquarters of HSBC in Canary Wharf, London On 11 May 2011 the new chief executive Stuart Gulliver announced that HSBC would refocus its business strategy and that a large-scale retrenchment of operations, particularly in respect of the retail sector, was planned. HSBC would no longer seek to be 'the world's local bank', as costs associated with this were spiralling and US$3.5bn needed to be saved by 2013, with the aim of bringing overheads down from 55% of revenues to 48%. In 2010, then-chairman Stephen Green planned to depart HSBC to accept a government appointment in the Trade Ministry. Group Chief Executive Michael Geoghegan was expected to become the next chairman. However, while many current and former senior employees supported the tradition of promoting the chief executive to chairman, many shareholders instead pushed for an external candidate. [38][39] HSBC's board of directors had reportedly been split over the succession planning, and investors were alarmed that this row would damage the company.[40] On 23 September 2010, Geoghegan announced he would step down as chief executive of HSBC. [41] He was succeeded as chief executive of HSBC by Stuart Gulliver, while Green was succeeded as Chairman by Douglas Flint; Flint was serving as HSBC's finance director (chief financial officer). August 2011: Further to CEO Stuart Gulliver's plan to cut $3.5 billion in costs over the next 2 years, HSBC announced that it will cut 25,000 jobs and exit from 20 countries by 2013 in addition to 5,000 job- cuts announced earlier in the year. The consumer banking division of HSBC will focus on the UK, Hong Kong, high-growth markets such as Mexico, Singapore, Turkey and Brazil, and smaller countries where it has a leading market share. [42][43] According to Reuters, Chief Executive Stuart Gulliver told the media, "There will be further job cuts. There will be something like 25,000 roles eliminated between now and the end of 2013."[44][45] In August 2011 "to align our U.S. business with our global network and meet the local and international needs of domestic and overseas clients", HSBC agreed to sell 195 branches in New York and Connecticut to First Niagara Financial Group Inc for around $1 billion and announced the closure of 13 branches in Connecticut and New Jersey. The rest of HSBC's U.S. network will only be about half from a total 470 branches before divestments. [46] On 9 August 2011, Capital One Financial Corp. agreed to acquire HSBC's U.S. credit card business for $2.6 billion, [47] netting HSBC Holdings an estimated after-tax profit of $2.4 billion. [48] In September it was announced that HSBC seeks to sell its general insurance business for around $1 billion. In 2012, HSBC was the subject of hearings of the U.S. Senate permanent subcommittee for investigations for severe deficiencies in its anti money laundering practices. On 16 July the committee presented its findings.[49][50] Among other things it concludes that HSBC has been transferring $7 billion in banknotes from its Mexican to its US subsidiary, much of it related to drug dealing, was disregarding terrorist financing links and was actively circumventing U.S.

safeguards to block transactions involving terrorists, drug lords, and rogue regimes, including hiding $19.4 billion in transactions with Iran. In July 2012 HSBC came under investigation for allegedly assisting in the money laundering of drug dealers[51] and terrorist money [52]for many years, after a probe by the US Federal Reserve and Office of the Comptroller of the Currency found that there was "significant potential for unreported money laundering or terrorist financing".[53][54] On 11 December 2012, HSBC agreed to pay a record $1.92 billion fine in this money laundering case. "Bank officials repeatedly ignored internal warnings that HSBC's monitoring systems were inadequate, the Justice Department said. In 2008, for example, the CEO of HSBC Mexico was told that Mexican law enforcement had a recording of a Mexican drug lord saying that HSBC Mexico was the place to launder money."[55] The DOJ, however, decided not to pursue criminal penalties, a decision which the New York Times labelled a "dark day for the rule of law."[56] "We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again." HSBC Chief Executive Stuart Gulliver said.[55]

Operations
A map showing the countries of the world in which HSBC currently has operations HSBC has its world headquarters at 8 Canada Square in Canary Wharf, London.[57] HSBC 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 its business. HSBC is the largest bank in Hong Kong and prints most of Hong Kong's local currency in its own name. As of 2 April 2008, according to Forbes magazine, HSBC was the fourth-largest bank in the world by assets (with $2,348.98 billion), the second largest in terms of revenues (with $146.50 billion) and the largest in terms of market value (with $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).[58] Since the end of 2005, HSBC has been rated the largest banking group in the world by Tier 1 capital.[59] In February 2008, HSBC was named the world's most valuable banking brand by The Banker magazine.[60][61] HSBC is known for a conservative and risk-averse approach to business a company tradition going back to the 19th century.[62] This reputation has been brought into question in the 21st 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.[63]

HSBC is currently audited by one of the Big Four auditors, KPMG. The HSBC and KPMG headquarters are adjacent to one another, with KPMG occupying 15 Canada Square. [64] HSBC Main Building, Hong Kong is also adjacent to KPMG office located in Prince's Building.

Principal subsidiaries

You might also like