Case Study 1 : Banking – HSBC Further Information about the presentation Background of HSBCHSBC History:The HSBC Group is named after its founding member, The Hongkong and Shanghai BankingCorporation Limited, which was established in 1865 in Hong Kong and Shanghai to financethe growing trade between China and Europe.The inspiration behind the founding of the Bank was Thomas Sutherland, a Scot who wasthen working as the Hong Kong Superintendent of the Peninsular and Oriental SteamNavigation Company. He realised that there was considerable demand for local bankingfacilities both in Hong Kong and along the China coast and he helped to establish the Bank inMarch 1865. Then, as now, the Banks headquarters were at 1 Queens Road Central in HongKong and a branch was opened one month later in Shanghai.Throughout the late nineteenth and the early twentieth centuries, the Bank established anetwork of agencies and branches based mainly in China and South East Asia but also withrepresentation in the Indian sub-continent, Japan, Europe and North America. In many of itsbranches the Bank was the pioneer of modern banking practices. From the outset, tradefinance was a strong feature of the Banks business with bullion, exchange and merchantbanking also playing an important part. Additionally, the Bank issued notes in manycountries throughout the Far East.During the Second World War the Bank was forced to close many branches and its headoffice was temporarily moved to London. However, after the war the Bank played a key rolein the reconstruction of the Hong Kong economy and began to further diversify thegeographical spread of the Bank.(Source from http://www.hsbc.com.hk/1/2/about/home/hsbc-s-history)Services:There are 4 distinct groups divided by HSBC. Retail Banking & Wealth Management HSBC provides more than 100 million customers worldwide with a full range of personal financial services, including the followings, 1. Current & Saving Accounts 2. Mortgage loans
3. Car financing 4. Insurance 5. Loans 6. Credit Cards 7. Pensions 8. Investments Commercial Banking HSBC provides financial services to small, medium-sized and middle-market enterprises. The group has more than 3 million of such customers, they are, 1. Sole proprietors 2. Partnerships 3. Clubs and Associations 4. Incorporated Businesses 5. Public Quoted Companies Global Banking & Markets Global Banking and Markets is the investment banking arm of HSBC. It provides Investment banking and financing solutions (For corporate and institutional clients) including: 1. Corporate Banking 2. Investment Banking 3. Trade Services 4. Payments and Cash Management 5. Leveraged Acquisition Finance Global Private Banking HSBC Private Bank is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank, together with the private banking activities of HSBC Trinkaus, known collectively as Group Private Banking, provides services to high net worth individuals and their families through 93 locations in some 42 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.Overview:HSBC is one of the world’s largest banking and financial services organisations. Witharound 7,200 offices in both established and faster-growing markets, we aim to bewhere the growth is, connecting customers to opportunities, enabling businesses tothrive and economies to prosper, and ultimately helping people to fulfil their hopes
and realise their ambitions.We serve around 89 million customers through our four global businesses: RetailBanking and Wealth Management, Commercial Banking, Global Banking and Markets,and Global Private Banking. Our network covers 85 countries and territories in sixgeographical regions: Europe, Hong Kong, Rest of Asia-Pacific, Middle East and NorthAfrica, North America and Latin America. Our aim is to be acknowledged as theworld’s leading international bank.Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges,shares in HSBC Holdings plc are held by over 220,000 shareholders in 132 countriesand territories. (Source from HSBC Annual Report and Accounts 2011)Income:(Source from HSBC Annual Report and Accounts 2011)
Impacts and Advantages under WTOPotential of China’s marketImpacts:Many overseas transnational enterprises want to access to China’s market due to the hugelatent capacity of development. This cause a great competition.Advantages:There are many places in china still undeveloped. Thus, there is a great potential for us toexpand our businesses.Opened marketImpacts:Because of the same rights to all competitors, it is difficult to occupy most of thecustomers(or markets) in a short time.Advantages:Due to the opened market, imports and exports will be increased so the finance will be rosesynchronously.Fairer EnvironmentImpacts:Although we have the same treatment with the local company, we have less understandingabout the local market.Advantages:After China joined WTO, overseas investors can enjoy the same treatment as the domesticenterprises.