HSBC is a UK banking and financial services company operating globally, serving more than 38 million customers in 66 countries and territories.
As of 2018, the company is the seventh-largest bank in the world and the largest in Europe.
It has assets totaling around £ 2.52 trillion.
The story of HSBC began in Hong Kong, with branches opening in Shanghai and Hong Kong in March 1865, and it was the first domestically owned and operated bank.
HSBC Holdings, which is headquartered in London, was incorporated by the Hong Kong and Shanghai Banking Corporation in 1991 as a collective holding company.
Interestingly, the name “HSBC” is derived from Hong Kong and Shanghai Banking Corporation’s initials, the HSBC founding member.
The company’s red and white pistol symbol was inspired by the bank’s original house flag, which was based on a Saint Andrew’s cross.
The two lions that appear in the symbol are named after Stephen and Stitt, after the top managers who worked for the company during the 1920s.
The inspiration behind the creation of HSBC was from a Scottish man named Sir Thomas Sutherland, who was at the time working for the Peninsula and Eastern Navigation Company of Asia.
Sutherland quickly realized an enormous untapped potential for banking on the Chinese coast and Hong Kong.
He helped found the bank, which opened its doors to its first customers in March 1865, followed by a second location in Shanghai barely a month later.
After the bank started its operations immediately, it began opening more branches to provide its services to more customers.
Although HSBC’s global network of branches was extensive, stretching as far as North America and Europe, the organization focused its primary focus on serving the Asia-Pacific region in general, and China in particular.
The bank was a pioneer in many of the modern banking practices it has enjoyed today.
For example, It was the first bank established in Thailand, and it also printed the country’s first currency notes.
From the start, trade finance has been a significant focus of HSBC’s domestic and international operations. The bank has been recognized over the years for its expertise in this particular area.
Also, the bank has become known for its bullion, issuance, and commercial banking services.
In 1874, the company made history by issuing the first public loan in China, and since then, it has given most of the available loans in China.
In the early twentieth century, the bank began expanding its business in the East.
HSBC has begun issuing loans to Asian governments, especially those in China.
The money was used to modernize countries and create various infrastructure projects, such as building railways.
During World War II, many HSBC personnel in the East were prisoners of war, with the enemy advancing through their operation areas.
Nevertheless, the bank managed to survive, thanks to Arthur Morse’s stewardship and his prudent policy of increasing large reserves during peacetime.
In other markets, the bank has begun to diversify and grow through a series of acquisitions and alliances.
Notably, the British Bank of the Middle East and Mercantile Bank’s acquisition was a move that took HSBC into new territories while expanding its services by establishing a commercial banking division in 1972.
This led to the company’s establishment to transition from a large regional financial institution to one of the world’s leading financial services providers by the end of the twentieth century.
In the second decade of the 21st century, HSBC consolidated its position as one of the biggest names in the financial services sector and renewed its focus on its assets by fostering a series of strategic and organic partnerships in China.
The bank’s diversification, along with its stability, has enabled it to withstand the turmoil within global financial markets and economies.
In April 2000, HSBC expanded into Europe by acquiring the French bank Crédit Commercial de France for £ 6.6 billion.
A year later, in July, HSBC bought Demirbank, an insolvent Turkish bank. In August 2002, the company acquired the third-largest retail bank in Mexico, Grupo Financiero Bital, SA de CV, for $ 1.1 billion.
Under Sir John Bond’s leadership, HSBC expanded into the US in 2002 and acquired the Household Finance Corporation (HFC), a US credit card issuer and mortgage lender, for £ 9 billion.
Under the new name HSBC Finance, this division was the second-largest bank in the United States.
In April 2003, HSBC Holdings moved to its new headquarters at 8 Canada Square, London.
In September of the same year, the company bought Polski Kredyt Bank SA from Poland for $ 7.8 million.
Just one year later, HSBC expanded in China by purchasing 19.9% of Shanghai’s Bank of Communications.
Also, in the UK, HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for £ 763m in December 2004.
And between 2005 and 2008, other notable acquisitions included Metris Inc, a US credit card issuer for $ 1.6 billion; Dar Al Salam Investment Bank of Iraq; 90 branches of Banca Nazionale del Lavoro in Argentina and IL&FS Investment, an Indian retail brokerage firm.
During the global financial crisis in 2008, HSBC weathered the economic storm better than most other international banks.
To put this into account, when HM Treasury requested all UK banks to increase their capital in October 2007, the group transferred £ 750 million to London within hours. It announced that it had just loaned £ 4 billion to other UK banks.
By March 2009, HSBC announced that it had a profit of $ 9.3 billion in 2008.
Meanwhile, they announced a £ 12.5bn rights issue that enabled the company to buy out other struggling banks.
Interestingly, uncertainty about the impacts of the rights issue on institutional investors has caused in Hong Kong.
As a result, on March 9, 2009, HSBC’s share price was down 24.14%, with 12 million shares selling in the last few seconds of trading.
In February 2015, things got very tough for HSBC.
At the time, the International Consortium of Investigative Journalists (ICIJ) released information about HSBC’s business behavior under the heading “Swiss Leaks” based on hacked 2007 HSBC account records from whistleblower Hervé Falciani.
ICIJ claimed that HSBC has benefited from corrupt politicians, dictators, tax evaders, arms dealers, blood diamond dealers, and other clients.
A few months later, HSBC sold its Brazilian unit to Banco Bradesco for $ 5.2 billion, indicating disappointing performance.
In March 2017, the Guardian newspaper, uncovered by an investigation called Global Laundromat, revealed that hundreds of banks had helped launder KGB-related money from Russia.
HSBC is included in 17 banks in the UK, including Royal Bank of Scotland, Lloyds, and Barclays.
HSBC denied all charges and stated that it was against financial crime.
In October 2017, Mark Tucker succeeded Douglas Flint as HSBC Group President.
HSBC stock history
HSBC is a popular stock with investors, with the bank boasting over 200,000 shareholders spread over 125 countries.
The company has primary bilateral stock listings on the London Stock Exchange in the United Kingdom (traded under the HSBA index) and the Hong Kong Stock Exchange (Traded under the HKG index).
It also has secondary listings on other exchanges, most notably in Bermuda, the New York Stock Exchange (NYSE), and Euronext in Paris.
HSBC trades within the banking and financial services sector and competes with others in the banking sector.
HSBC’s fiscal year runs parallel to the calendar year, including December 31.
The bank’s annual results are usually announced in late February or the early part of March of the following year.
HSBC will also publish its interim results at the end of July or early August.
There are also quarterly updates announced after the first and third quarters.
The bank’s policy is to pay dividends in three equal installments and a fourth variable dividend.
The pound sterling value for HSBC is variable and depends heavily on the movements in the forex market.