HSBC facts for kids
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| Public | |
| Traded as | |
| Industry | Financial services |
| Founded |
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| Founder | Sir Thomas Sutherland |
| Headquarters | 8 Canada Square London, England, UK |
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Area served
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Worldwide |
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Key people
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| Products |
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| Revenue |  US$62.611 billion (2023) |
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Operating income
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US$30.348 billion (2023) |
| US$24.559 billion (2023) |
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| Total assets | US$3.038 trillion (2023) |
| Total equity | US$192.610 billion (2023) |
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Number of employees
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221,000 (2024) |
| Subsidiaries |
Subsidiaries
Hang Seng Bank HSBC Bank Australia HSBC Bank Argentina HSBC Bank India HSBC Bank Hong Kong HSBC Trinkaus HSBC Bank Malaysia HSBC México HSBC Bank Middle East HSBC Sri Lanka HSBC Bank USA HSBC Finance HSBC UK Bank M&S Financial Services |
HSBC Holdings plc is a big British bank and financial services group. Its name comes from its original founding member, The Hongkong and Shanghai Banking Corporation. The main office is in London, England. HSBC has strong historical ties to East Asia and operates in many countries around the world. It is the largest bank based in Europe when you look at its total assets. In 2021, HSBC managed a huge amount of money for its customers.
HSBC started as a trading house in British Hong Kong in 1865. It opened branches in Shanghai in the same year. In 1991, the current main company, HSBC Holdings plc, was set up in London. The original bank in Hong Kong became a part of this new company. In 1992, HSBC bought Midland Bank, which made it one of the biggest banks in the United Kingdom.
HSBC has offices, branches, and smaller companies in 62 countries across Africa, Asia, Oceania, Europe, North America, and South America. It serves about 39 million customers. In 2023, it was ranked as the 20th largest company in the world by Forbes. HSBC's shares are traded on the Hong Kong Stock Exchange and London Stock Exchange. It also has listings on the New York Stock Exchange and the Bermuda Stock Exchange.
HSBC has faced some challenges and has been fined for not properly checking where money came from or for helping set up ways to avoid taxes.
Contents
About HSBC
How it Started
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After the British took control of Hong Kong, traders needed a bank. This bank would help with the growing trade between China, India, and Europe.
The founder, Thomas Sutherland, wanted a bank that followed "sound Scottish banking principles." The first office was chosen in Hong Kong at Wardley House. This spot was picked because it had good feng shui, which is a Chinese practice about arranging things to create good energy.
The bank started on March 3, 1865, with HK$5 million in capital. It opened a branch in Shanghai in April of the same year. Soon after, it began printing its own banknotes in Hong Kong and Shanghai. The bank was officially named The Hongkong and Shanghai Banking Corporation in 1866. A branch in Japan was also opened in Yokohama in 1866.
Growing the Business
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Sir Thomas Jackson became the chief manager in 1876. During his 26 years, the bank became a leader in Asia. It built new buildings in Bangkok (1921), Manila (1922), and Shanghai (1923). A new main office was built in Hong Kong in 1935. The bank's banknotes became very important due to unstable times.
Expanding Globally
Michael Turner became chief manager in 1953. He worked to make the bank's business more varied. During his time, the bank opened a branch in California in 1955. It also bought The British Bank of the Middle East and the Mercantile Bank in 1959.
In the 1960s, a building used by HSBC in Singapore was bombed. This happened during a conflict between Indonesia and Malaysia. Three people died and 33 were hurt.
The current HSBC building in Hong Kong was designed by Sir Norman Foster. When it was finished in 1985, it was one of the most expensive and advanced buildings in the world.
Creating the HSBC Group
On October 6, 1989, the bank was officially registered in Hong Kong.
HSBC Holdings plc was set up in 1991 as the main company. This was done to prepare for buying Midland Bank in the UK. It also prepared for Hong Kong becoming part of China. HSBC Holdings bought Midland Bank in 1992. This made HSBC a very big bank in the United Kingdom. As part of the deal, HSBC Holdings moved its main office from Hong Kong to London in 1993.
HSBC started buying banks in South America in 1997. It bought Banco Bamerindus in Brazil and Roberts SA de Inversiones in Argentina. In 1999, HSBC grew in the United States. It bought Republic National Bank of New York.
From 2000 to 2010
HSBC expanded into Europe in 2000 by buying Crédit Commercial de France, a large French bank. In 2001, it bought Demirbank, a Turkish bank. In 2002, HSBC bought part of Arthur Andersen's tax business. It also acquired Grupo Financiero Bital, Mexico's third largest retail bank.
In November 2002, HSBC grew even more in the United States. It bought Household Finance Corporation (HFC), a company that issued credit cards. This deal was seen as very important for the bank. The new company, HSBC Finance, became a major lender in the US.
HSBC Holdings' new main office at 8 Canada Square, London, opened in April 2003.
In 2003, HSBC bought a large part of Asset Management Technology (AM TeK) in Korea. It also bought Polski Kredyt Bank SA in Poland. In 2004, HSBC bought 19.9% of the Bank of Communications in Shanghai, China. In the UK, it acquired Marks & Spencer Retail Financial Services Holdings Ltd. More acquisitions followed in 2005, including Metris Inc in the US and Dar es Salaam Investment Bank in Iraq. In 2006, HSBC bought 90 branches of Banca Nazionale del Lavoro in Argentina. In 2007, it acquired the Chinese Bank in Taiwan. In 2008, HSBC bought IL&FS Investment in India and started banking in Algeria.
In 2005, a magazine said HSBC had issues with how it handled money from certain sources. HSBC's CEO at the time, Stephen Green, said this was wrong. However, later investigations showed that the bank had problems with its money checking procedures.
In 2007, HSBC was one of the first major banks to report losses from a housing market problem in the US.
HSBC was considered one of the world's strongest banks. In 2007, when UK banks needed more money, HSBC quickly transferred a large sum to London.
In March 2009, HSBC announced it would close its HSBC Finance branches in the United States. This led to many job losses. The chairman, Stephen Green, said that looking back, they wished they hadn't made that purchase.
From 2010 to 2013
In April 2011, HSBC decided to close its regular banking business in Russia.
In May 2013, the new chief executive, Stuart Gulliver, announced that HSBC would change its business plan. It would reduce its operations, especially in retail banking. The goal was to save money and make the bank more efficient.
In 2012, HSBC was investigated by the U.S. Senate for not having strong enough systems to prevent improper money transfers. The investigation found that HSBC had transferred large amounts of money from its Mexican branch to its US branch without proper checks. It also found that the bank had not followed US rules to block transactions with certain countries.
On December 11, 2012, HSBC agreed to pay a large fine of $1.92 billion for these issues. The US Justice Department said that bank officials had ignored warnings about their systems. HSBC's chief executive, Stuart Gulliver, said: "We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again."
Since 2013
In July 2013, Alan Keir became the chief executive of HSBC Bank plc. He oversaw the bank's operations in the UK, Europe, the Middle East, and Africa.
In February 2015, a group of journalists released information about HSBC's business. This information, called Swiss Leaks, came from hacked account records. It suggested that the bank had done business with people who were involved in tax evasion or other questionable activities.
In August 2015, HSBC announced it would sell its business in Brazil to Banco Bradesco. In 2015, HSBC was named the most trusted foreign bank in India.
In 2016, the bank was mentioned in the Panama Papers investigation. This investigation looked into how wealthy people used offshore companies.
In March 2017, a newspaper reported that many banks, including HSBC, had helped move money out of Russia in a scheme called Global Laundromat. HSBC processed a large amount of this money, mostly through its Hong Kong branch. HSBC stated that it was against financial crime and that such cases show the need for better information sharing.
On October 1, 2017, Mark Tucker became the group chairman of HSBC. In February 2018, John Flint became the Group Chief Executive. In August 2019, Noel Quinn took over as temporary chief executive, and then permanently in March 2020.
In February 2020, HSBC announced it would cut 35,000 jobs worldwide. This was because the company's profits had decreased.
In October 2020, HSBC promised to achieve zero carbon emissions by 2050. This means the bank itself will be carbon neutral. It also means it will only work with clients who are carbon neutral. It also pledged to help clients make this change.
In January 2021, HSBC announced it would close 82 branches in Britain. In May 2021, HSBC said it would leave the US retail banking business. It sold some branches and closed others. The bank wants to focus on wealthy clients who are connected globally.
In May 2021, HSBC promised to stop financing the coal industry. It published a new policy in December 2021 to explain this.
In August 2021, HSBC bought AXA Singapore, an insurance company. In December 2021, HSBC Asset Management bought L&T Investment Management in India.
In June 2022, HSBC announced it plans to sell its business in Russia. This deal needs approval from the Russian government.
In July 2022, HSBC became the first foreign bank to open a Chinese Communist Party (CCP) committee in its Chinese investment banking company.
In November 2022, HSBC announced it would leave the Canadian market. Royal Bank of Canada will buy HSBC Canada. HSBC has been trying to cut costs and sell businesses outside of Asia.
In February 2023, HSBC announced that its profits had almost doubled in the last part of 2022. However, its profit before tax actually fell because of the cost of selling its French retail banking operations. The bank also announced it was closing 114 branches in the United Kingdom. This is because more people are using online banking.
In May 2023, HSBC's profits increased a lot as interest rates went up.
In December 2023, HSBC Asset Management announced it would buy Silkroad Property Partners, an investment manager in Singapore. This deal will help HSBC grow its real estate fund management in the region.
In 2024, HSBC, as part of the Hong Kong Association of Banks, started planning to stop using checks in Hong Kong. They want to switch to electronic payments.
In 2024, HSBC launched a new international payments app. It will compete with other apps like Revolut and Wise. It will help regular customers with low-cost currency exchange.
In 2024, HSBC Philippines launched "Omni Collect." This allows companies to connect to HSBC's system to manage payments across different channels.
On April 9, 2024, HSBC announced it would sell its Argentina business to Galicia for $550 million. The deal is expected to be finished by the end of the year.
How HSBC Works
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HSBC's main office is at 8 Canada Square in Canary Wharf, London. In June 2023, the bank announced it plans to move from this building in 2027. They intend to move to a new building in the City of London.
Size and Profit
- In 2014, HSBC was the fourth-largest bank in the world by assets. It was also the second largest in terms of money earned and the largest in terms of its market value.
- It was also the most profitable bank in the world in 2007.
- In June 2006, The Economist magazine said HSBC was the largest banking group in the world. In June 2014, The Banker magazine ranked HSBC first in Western Europe and 5th in the world for its main capital.
- In February 2008, HSBC was named the world's most valuable banking brand.
- HSBC has been checked by PwC, one of the biggest auditing firms, since 2015.
- Even though HSBC is based in the UK, about two-thirds of its profits come from Asia. China alone contributed 44% of the bank's profit in 2022.
Main Companies and Divisions
HSBC has different parts that focus on different types of customers: Commercial Banking (CMB), Global Banking and Markets (GBM), and Wealth and Personal Banking (WPB).
Commercial Banking
This part of HSBC provides financial services to small, medium, and large businesses. It helps over 2 million customers, including small business owners, partnerships, and big companies.
Global Banking and Markets
This is HSBC's investment banking part. It helps large companies and financial groups with things like corporate banking, investment banking, and managing money. It also helps with trading in different markets like foreign exchange. Global Banking and Markets has offices in more than 60 countries. It focuses on growing markets and financing.
Wealth and Personal Banking
This part helps regular customers with their daily money needs. It also helps them manage, protect, and grow their wealth. HSBC offers services like checking accounts, savings accounts, mortgage loans, insurance, credit cards, and investments to over 54 million customers worldwide. In 2020, HSBC combined its Retail Banking and Wealth Management with Global Private Banking to form this new division.
Service Centers
To save money, HSBC moves some of its work to countries where costs are lower. These places handle tasks like data processing and customer service. They also do internal software engineering in cities like Pune (India), Gurgaon (India), Bangalore (India), Chennai (India), Hyderabad (India), Visakhapatnam (India), Kolkata (India), Colombo (Sri Lanka), Guangzhou (China), Kraków (Poland), Curitiba (Brazil), and Kuala Lumpur (Malaysia).
HSBC Products
HSBC Direct
HSBC Direct is an online and phone banking service. It offers mortgages, accounts, and savings. It started in the USA in 2005. It is based on HSBC's 'First Direct' service in Britain, which began in the 1980s. This service is now available in Canada, Taiwan, South Korea, Australia, and France.
HSBCnet
HSBCnet is a system that helps businesses manage their money. It allows them to make payments, manage cash, and handle trade services. It also provides financial research and allows trading in foreign exchange. This system is used by HSBC's large company and financial clients.
HSBC Advance
HSBC Advance is a product for working professionals. The benefits and requirements change by country. Usually, you need to have a certain amount of money deposited or invested. It offers daily banking services like credit cards and savings accounts. It also helps with protection plans and financial planning. If you are an HSBC Advance customer, you can open accounts in other countries and transfer your credit history.
HSBC Premier
HSBC Premier is a special financial service for wealthy customers. It has its own credit cards around the world. Customers get a dedicated manager, 24-hour phone support, free banking, and better rates. If you are a Premier customer in one country, you get Premier services in all countries that offer it.
HSBC Jade
HSBC Jade is an invite-only financial service. It is for people who have between $1 million and $5 million in investments with HSBC. You usually need to be an HSBC Premier member first. Besides Premier benefits, Jade members get special concierge services and help with estate planning. They also get access to special Jade Centres worldwide.
HSBC Logo
In 1998, HSBC decided to use the same brand name and hexagon symbol everywhere it operates. This was to make the group more recognizable. The hexagon symbol was first used by the Hongkong and Shanghai Banking Corporation in 1983. It came from the bank's house flag, which had a red hourglass shape on a white background. The design was based on the cross of Saint Andrew. The logo was designed by Austrian artist Henry Steiner.
In 2018, HSBC made small changes to its logo. The word "HSBC" was moved to the right and made smaller. The font was changed, and the red color was made a bit darker.
Sponsorships
HSBC used to sponsor the Jaguar Racing Formula One team. They stopped this sponsorship after seven years when Red Bull bought the team.
In the mid-2000s, HSBC started focusing on sponsoring golf. They became the main sponsor for several golf events. These include the WGC-HSBC Champions and the Abu Dhabi HSBC Golf Championship. HSBC also supports HSBC Golf Roots, which is a program for young golfers. In 2010, HSBC became the 'Official Banking Partner' of the Open Championship golf tournament.
In October 2010, HSBC made a deal to be the first main sponsor of the World Sevens Series in rugby. They paid over $100 million for the naming rights to all the tournaments. HSBC also sponsors the Hong Kong Rugby Union and the New South Wales Waratahs rugby team. They sponsored the British & Irish Lions rugby team on their tours in 2009 and 2013.
HSBC is also the official banking partner of the Wimbledon Championships tennis tournament. They provide banking services at the event. They also renamed the junior tennis event as the HSBC Road to Wimbledon National 14 and Under Challenge.
HSBC also sponsors projects in education, health, and the environment. In 2006, HSBC partnered with SOS Children as part of their Future First program.
Ownership
About 44% of HSBC shares are owned by the public. Around 56% are held by large organizations. The biggest shareholders in early 2024 included:
- BlackRock
- Ping An Asset Management
- The Vanguard Group
- Norges Bank
- Legal & General
Leadership
- Group Chairman: Mark Tucker (since October 2017)
- Group Chief Executive: Noel Quinn (since March 2020)
Former Group Chairmen
The role of Group Chairman started in 1991.
- Sir William Purves (1991–1998)
- Sir John Bond (1998–2006)
- The Lord Green (2006–2010)
- Sir Douglas Flint (2010–2017)
Former Group Chief Executives
The role of Group Chief Executive started in 1991.
- William Purves (1991–1993)
- John Bond (1993–1998)
- Keith Whitson (1998–2003)
- Stephen Green (2003–2006)
- Michael Geoghegan (2007–2010)
- Stuart Gulliver (2011–2018)
- John Flint (2018–2019)
See Also
- HSBC lions
- List of banks in the United Kingdom
- List of buildings and structures in Hong Kong
- Peking University HSBC Business School
