HSBC

HSBC

HSBC

Introduction

HSBC is one of the largest global banks, with operations throughout the United Kingdom and Europe, North and South America, Asia-Pacific, Australia, the Middle East, and Africa. Globally, HSBC has about 10,000 offices in 82 countries and territories, servicing approximately 130 million customers. HSBC Bank is engaged in the provision of banking and related financial services. Co. divides its activities into the business segments: UK Retail Banking, Continental Europe Retail Banking, Global Banking and Markets, and Private Banking. UK Retail Banking comprises two customer groups: Personal Financial Services and Commercial Banking. Some services provided by HSBC include current accounts, savings, personal loans, mortgages, cards, financial planning, as well as life and general insurance. As of Dec 31 2010, HSBC had total assets of £798,494,000,000 and total deposits of £392,410,000,000.

Service Components

Inseparability

HSBC operates across four distinct segments: commercial banking; personal financial services; global banking and markets; and private banking. It also has a small "other" segment. Collectively, these segments provide consumer and commercial banking services, investment banking, credit cards, asset management, private banking, securities underwriting and trading, insurance and leasing. Most specific to this industry are the commercial banking and personal financial services segments.

Through HSBC's commercial banking segment, the company aims to be the leading international business bank. This segment provides businesses and customers payments, collections, liquidity management, account, and wealth management services worldwide.

The company's personal financial services segment provides customers with a vast range of basic banking products and services. These include deposit accounts, various mortgage and finance loans, debit and credit cards, insurance and investment services, local and international payments services, and taxpayer financial services (Groppelli and Ehsan, 2006, 23-39).

The global banking and markets division provides customized financial solutions to clients worldwide. These clients tend to be larger, such as governments and corporations (Groppelli and Ehsan, 2006, 32-46). Finally, HSBC's “other” division comprises the company's captive private equity funds, strategic relationships with third-party private equity managers and other investments.

Variability

Over the five years to 2011, company revenue increased 7.2% annually to $99.2 billion. As with most banks and financial service companies that operate globally, the recent financial crisis affected HSBC. However, overall the company has fared well, with continued success in its consolidated performance. Specific to the United States, however, mortgage defaults plagued HSBC and the company ended up shutting down Decision One in 2007, which was the US-based wholesale subprime lending unit of HSBC Finance (Jane, 2008, 25-28). HSBC also placed its US vehicle lending business in run-off, while the consumer finance operations will begin to focus on card and consumer lending.

Perishability

The key success factors of HSBC are:

Membership of joint marketing/distribution operationsDeveloping innovative alliances/joint ventures that help expand distribution channels and extend customer reach are crucial, reducing costs and the reliance on branch networks.

Willingness to outsource when appropriateOutsourcing specific, non-core banking activities to other entities that have operating efficiencies in those areas allows banks to reduce the costs associated with those activities and helps improve profit margins.

Superior financial management and debt managementA bank's management of its interest rate and ...