HSBC Holdings Plc. is a global financial service company headquartered in London, United Kingdom.
As of 2010, it is both the world's largest banking and financial services group and the world's 8th largest company according to a composite measure by Forbes magazine.
HSBC has an enormous operational base in Asia and significant lending, investment, and insurance activities around the world.
As of August 2010, it was the largest company listed on the London Stock Exchange, with a market capitalization of £115.8 billion.
GROUP STRUCTURE HSBC Holdings is a public limited company incorporated in England and Wales. Headquartered in London, the HSBC group operates in five regions: Europe; Hong Kong; the rest of Asia Pacific; including the Middle East and Africa; North America; and South America. The entities which form the HSBC Group provide a comprehensive range of financial services to personal, commercial, corporate, institutional and investment, and private banking clients. In 2002, HSBC launched a campaign to differentiate its brand from those of its competitors by describing the unique characteristics which distinguish HSBC, summarized by the words 'THE WORLD'S LOCAL BANK'.
SWOT ANALYSIS SWOT has a long history as a tool of strategic and marketing analysis. It advocates say that it can be used to gauge the degree of “fit” between the organisation’s strategies and its environment, and to suggest ways in which the organisation can profit from strengths and opportunities and shield itself against weaknesses and threats. However, SWOT has come under criticism recently. Because it is so simple, both students and managers have a tendency to use it without a great deal of thought, so that the results are often useless. Another problem is that SWOT, having been conceived in simpler times, does not cope very well with some of the subtler aspects of modern strategic theory, such as trade-offs .
STRENGTHS The bank is well capitalized and this has enabled it to perform relatively well against other banks in recent economic events. The level of capitalization means that, going forward, the bank is unlikely to need to borrow from the UK government: this will enable it to retain more autonomy. The bank has a strong presence in emerging markets, putting it in a good position to take advantage of future growth in those economies. The bank’s global presence in Europe, Asia and South America helps to spread risk and offers significant economies of scale.
CONTD.. Despite rebranding relatively recently (1999), the HSBC brand has become well-established and is considered particularly valuable within the industry. Size: World's largest (based on a composite score, Forbes) and most profitable banking corporation. Highest international presence: 128 mn customers worldwide. London & NY listing: Prestige and visibility. Access to UK and US capital markets for future capital raising. Diversified approach - both geographically and on basis of customer group
WEAKNESS HSBC associates itself strongly with investment in the small business sector, but the current economic situation has led to increased risks, potentially compromising the activity levels in this area of the operation. The bank was involved with sub-prime markets in the US and has had to write off large figures lent to high-risk borrowers. Despite falls in the UK interest rate, HSBC has increased its mortgage rates. This may be perceived negatively by borrowers and potential borrowers, adds pressure to an already depressed housing market and could ultimately lead to more defaulting as borrowers struggle with higher repayments.
CONTD.. A redundancy programme announced recently may affect morale among staff, leading to decreased production and loyalty. HSBC’s branding emphasizes its global presence, and this may be seen negatively by some customers in its implication of homogenization and lack of personalization Branding: HSBC setup banks under different names (Hong Kong Bank of Canada, British Bank of the Middle East, etc) over 100 years. In 1998, they were all branded together, but the previous lack of branding and the name changes may have hurt HSBC in brand recognition. Bad debts due to housing market: HSBC's North American results have been significantly affected by higher loan impairment charges due to the impact on its portfolio of credit deterioration related largely to housing market weakness in the us.
OPPORTUNITY HSBC’s high level of capitalization places it in a strong position to acquire assets Banks finding trading conditions particularly difficult at present may be available at low cost HSBC also has adequate capital to purchase stronger banks such as Bank Ekonomi in Indonesia, in which it has purchased a stake to continue its Asian expansion despite challenging economic times. HSBC’s generally strong position presents the opportunity to outperform competitors during the economic downturn and to build a reputation for being one of the safer banks for depositors, helping to increase resources for lending.
CONTD.. Negative press coverage of competitors such as HBOS may encourage customers to choose HSBC instead. The Middle East: HSBC has been aggressively expanding its business in this region, where other banks are hesitant to setup, and its reaping rich dividends. Emerging economies: HSBC is the largest international bank in Asia wherein the economies have risen by unprecedented levels in previous years. By investing in these and other emerging countries like Brazil, HSBC can offset problems it may have as spending in the US and UK declines. Becoming world's leading financial services company: This is HSBC's stated aim. This requires HSBC to transform itself from a global bank to more diversified financial services group such as Citibank.
THREAT Trust in banks has decreased due to financial losses suffered by investors, who may be more inclined to invest elsewhere. Financial losses affecting banks and investors on a global scale have resulted in less credit being available to customers. In the UK this is coupled with increases in living costs resulting in less money being saved. The falling property market has created a rise in numbers of homeowners with negative equity. If a property is worth less than was borrowed to finance its purchase, there is little likelihood that the bank will recoup all its losses if owners default.
CONTD.. Claims have been made that HSBC has understated losses resulting from US sub-prime markets, and this could undermine confidence in the bank. Downturn in American spending: Because of American housing market collapse and fears of impending recession, Americans are predicted to rely less on consumer credit and more on their saving skills to get by. The drop in American spending will be bad for.
HSBC InvestDirect (India) Limited (HIDL) is listed on the Bombay Stock Exchange Limited and National Stock Exchange Limited.
IL&FS Investsmarton August13, 2009 renamed and rebranded as HSBC InvestDirect. Under its new name, HSBC InvestDirect (India) Limited will be aligned with the HSBC brand, one of the strongest in the world.
HSBC had acquired 93.86% stake in leading Indian brokerage firm IL&FS Investsmart
HSBC InvestDirect services over 160,000 customers in India through products and services comprising Advisory, Trading and NRI Services.
Globally, the HSBC Group has been named the No. 1 Bank by The Banker in 2008 and ranked as the sixth most valuable brand, valued at USD 33.5 billion by Brand Finance in 2009.
The business activities undertaken by HIDL through its subsidiaries include