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HSBC

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Overview: HSBC (formerly the Hong Kong and Shanghai Banking Corporation) is a leading international banking and securities firm whose home office is in London. Its U.S. headquarters are in New York, and its Canadian HQ is in Vancouver. The main U.S. lines of business for HSBC are:

  • Personal financial services (banking and investments)
  • Commercial banking
  • Global banking and markets
  • Private banking
  • Consumer finance (lending, credit cards and insurance)

Job Openings: See this current list of job openings.

Size: HSBC reported the following figures as of June 30, 2008:

  • U.S. branches = 460 (380 in NY State)
  • Canadian branches = 132
  • Worldwide offices = 9,500
  • Presence in 85 countries and territories
  • Worldwide customers = 128 million
  • Worldwide assets = $2.547 trillion (as of 6/30/08)
  • Worldwide employees = 335,000 (down to 296,000 as of May, 2011)
  • Employees in North America = 52,000

Positives: HSBC's slogan, "The world's local bank," sums up its operating philosophy of granting a great deal of automony to its far-flung operating units. This has given HSBC flexibility in adapting to local situations. HSBC also has been recognized as the world's most valuable banking brand by The Banker magazine.

A key tenet of the HSBC culture is steadiness, avoiding extremes of optimism and pessimism, unlike many competitors that go through cycles of excessive expansion followed by massive layoffs. Historically, HSBC has grown through strategic acquisitions of competitors, or divisions of competitors, at bargain prices during market downturns.

HSBC debt generally is rated the equivalent of AA or better by each of the major rating agencies.

Negatives: According to an in-depth profile of HSBC in the 4/16/2011 issue of The Economist, the company is headed towards "mediocrity." It has made only three "piddling" acquisitions in emerging markets since the start of the financial crisis in 2007, and the share of HSBC profits earned in emerging markets has declined steadily since 2005. Worse yet, as estimated by The Economist, 42% of HSBC's equity is deployed in business units that fail to earn the firm's cost of capital. Accordingly, new CEO Stuart Gulliver plans to announce a radical restructuring of HSBC on 5/11/2011 ("New chief in radical shake-up of HSBC," Financial Times, 4/21/2011). Sources inside the company indicate that a cost-cutting exercise aimed at saving about $1.7 billion in the U.K. alone is already underway, with a worldwide effort due to follow shortly.

On May 11, 2011, HSBC announced a worldwide cost-cutting drive aimed at reducing expenses by about 8%, or $2.5 billion to $3.5 billion. This involves the possible closure of operations in 39 of its 61 retail and wealth markets, affecting about 420 branches. HSBC's current worldwide staffing already has been cut to 296,000 in 87 countries, from 335,000 in 2008 (see above). Source: "HSBC Chief signals a profound overhaul," Financial Times, 5/12/2011.

On August 1, 2011, HSBC announced that it would eliminate 30,000 jobs worldwide by 2013. Additionally, the company is selling 195 bank branches, mainly in upstate New York, to First Niagara for about $1 billion ("HSBC Strategy Shift Cuts Jobs, Branches," The Wall Street Journal, 8/2/2011). In March 2013, further cuts ranging from 5,000 to 10,000 jobs were announced.

In July 2012, HSBC became embroiled in a major scandal, as U.S. regulators charged the bank with years of turning a blind eye to money laundering by international drug dealers and other criminal enterprises. In December 2012, a $1.9 billion fine was assessed.

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