Professional Documents
Culture Documents
HSBC Final Project
HSBC Final Project
SUBMITTED TO
UNIVERSITY OF MUMBAI
FOR ACADEMIC YEAR 2014 2015
ACKNOWLEDGEMENT
The first in accomplishment of this project is our Principal Dr. R.D. Bhagat, Vice
Principal Prof. Prajakta Paranjape, Course Co-ordinator Prof. Roshni Nagar and
Guide Prof. Audrin Colaco teaching & non teaching staff of VIVA College.
I would also like to thank all my college friends those who influenced my project in order
to achieve the desired result correctly.
DECLARATION
Date:
Place:
Sign:
INDEX
SR.N
O
TOPIC
PAGE
NO.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
HISTORY
FINANCIAL INCLUSION
EMPLOYEE VOLUNTEERING
HSBC HOLDING PLC
PROJECTS EDUCATION
PRODUCTS OF HSBC
OPERATIONS
GLOBAL PRODUTS LINE
CORPORATE SUSTAINABILITY
MONEY LAUNDERING
OTHER CONTROVERSIES
LOGO
SPONSORSHIPS
COMPANY OVERVIEW
KEY EXECUTIVES FOR HSBC
HSBCS KEY DEVELOPMENTS
HSBC GROUP MEMBERS
CONCLUSION
BIBLIOGRAPHY
6-11
12-14
15-16
17-18
19-22
23-29
30-35
36-37
38-39
40-41
42
43
44-45
46
47
48-49
50-51
52-53
54
HISTORY
Origins to 2000
The HSBC Main Building in 1901 in Hong Kong, the headquarters of the Hong Kong
and Shanghai Banking Corporation from 1886 to 1933 for its Hong Kong operation.
The HSBC Building in 2005 in Shanghai, the headquarters of the Hong Kong and
Shanghai Banking Corporation from 1923 to 1955 for its Shanghai operation.
For more information on the history of HSBC prior to the founding of HSBC Holdings in 1991,
see The Hongkong and Shanghai Banking Corporation.
The Hong Kong and Shanghai Banking Corporation was founded by Scotsman Sir
Thomas Sutherland in the then British colony of Hong Kong on 3 March 1865, and in Shanghai
one month later, benefiting from the start of trading into China, including opium trading. In
1980, HSBC acquired a 51% shareholding in US-based Marine Midland Bank, which it extended
to full ownership in 1987.
HSBC Holdings plc was established in the United Kingdom in 1991 as the parent
company to the Hongkong and Shanghai Banking Corporation in preparation for its purchase of
the UK-based Midland Bank and the impending transfer of sovereignty of Hong Kong to China.
HSBC Holdings' acquisition of Midland Bank was completed in 1992 and gave HSBC a
substantial market presence in the United Kingdom. As part of the takeover conditions for the
acquisition, HSBC Holdings plc was required to relocate its world headquarters from Hong Kong
to London in 1993.
Major acquisitions in South America started with the purchase of the Banco Bamerindus of
Brazil for $1bn in March 1997 and the acquisition of Roberts SA de Inversiones of Argentina for
$600m in May 1997. In May 1999, HSBC expanded its presence in the United States with the
purchase of Republic National Bank of New York for $10.3bn
2000 to 2010
The HSBC Main Building in Hong Kong, which was designed by Norman Foster and
completed in 1985.
Expansion into Continental Europe took place in April 2000 with the acquisition of
Crdit Commercial de France, a large French bank for 6.6bn. In July 2001 HSBC bought
Demirbank, an insolvent Turkish bank. In July 2002, Arthur Andersen announced that HSBC
USA, Inc., through a new subsidiary, Wealth and Tax Advisory Services USA Inc. (WTAS),
would purchase a portion of Andersen's tax practice. The new HSBC Private Client Services
Group would serve the wealth and tax advisory needs of high net worth individuals. Then in
August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third largest retail
bank for $1.1bn. In November 2002 HSBC expanded further in the United States. Under the
chairmanship of Sir John Bond, it spent 9 billion (US$15.5 billion) to acquire Household
Finance Corporation (HFC), a US credit card issuer and subprime lender. In a 2003 cover story,
The Banker noted "when banking historians look back, they may conclude that [it] was the deal
of the first decade of the 21st century". Under the new name of HSBC Finance, the division was
the second largest subprime lender in the US.
On 22 November 2001, the Hongkong and Shanghai Banking Corp would provide a
fixed-rate mortgage to buyers of Cheung Kong (Holdings)' Victoria Towers residential
development.
The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened
in April 2003.
In September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m. In June
2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai. In
the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd
for 763m in December 2004. Acquisitions in 2005 included Metris Inc, a US credit card issuer
for $1.6bn in August and 70.1% of Dar es Salaam Investment Bank of Iraq in October. In April
2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m. In
7
December 2007 HSBC acquired the Chinese Bank in Taiwan. In May 2008 HSBC acquired
IL&FS Investment, an Indian retail broking firm.
In 2005 Bloomberg Markets magazine accused HSBC of money-laundering for drug
dealers and state sponsors of terrorism. Then-CEO Stephen Green said that "This was a singular
and wholly irresponsible attack on the bank's international compliance procedures", but
subsequent investigation indicated that it was accurate and proved that the bank was involved in
money laundering throughout Mexico. U.S. Assistant Attorney General Lanny Breuer
characterised HSBC compliance during this period as "stunning failures of oversight and worse
... The record of dysfunction that prevailed at HSBC for many years was astonishing."
In March 2009, HSBC announced that it would shut down the branch network of its
HSBC Finance arm in the U.S., leading to nearly 6,000 job losses and leaving only the credit
card business to continue operating. Chairman Stephen Green stated, "HSBC has a reputation for
telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not
undertaken." According to analyst Colin Morton, "the takeover was an absolute disaster".
Although it was at the centre of the subprime storm, the wider group has weathered the
financial crisis of 20072010 better than other global banks. According to Bloomberg, "HSBC is
one of world's strongest banks by some measures". When HM Treasury required all UK banks to
increase their capital in October 2007, the group transferred 750 million to London within
hours, and announced that it had just lent 4 billion to other UK banks. In March 2009, it
announced that it had made US$9.3bn of profit in 2008 and announced a 12.5bn (US$17.7bn;
HK$138bn) rights issue to enable it to buy other banks that were struggling to survive. However,
uncertainty over the rights' issue's implications for institutional investors caused volatility in the
Hong Kong stock market: on 9 March 2009 HSBC's share price fell 24.14%, with 12 million
shares sold in the last few seconds of trading.
2010 to 2013
8 Canada Square, the world headquarters of HSBC in Canary Wharf, London
On 11 May 2011 the new chief executive Stuart Gulliver announced that HSBC would
refocus its business strategy and that a large-scale retrenchment of operations, particularly in
respect of the retail sector, was planned. HSBC would no longer seek to be 'the world's local
bank', as costs associated with this were spiralling and US$3.5bn needed to be saved by 2013,
with the aim of bringing overheads down from 55% of revenues to 48%. In 2010, then-chairman
Stephen Green planned to depart HSBC to accept a government appointment in the Trade
Ministry. Group Chief Executive Michael Geoghegan was expected to become the next
chairman. However, while many current and former senior employees supported the tradition of
promoting the chief executive to chairman, many shareholders instead pushed for an external
candidate. HSBC's board of directors had reportedly been split over the succession planning, and
investors were alarmed that this row would damage the company.
On 23 September 2010, Geoghegan announced he would step down as chief executive of
HSBC. He was succeeded as chief executive of HSBC by Stuart Gulliver, while Green was
succeeded as Chairman by Douglas Flint; Flint was serving as HSBC's finance director (chief
financial officer). August 2011: Further to CEO Stuart Gulliver's plan to cut $3.5 billion in costs
over the next 2 years, HSBC announced that it will cut 25,000 jobs and exit from 20 countries by
2013 in addition to 5,000 job- cuts announced earlier in the year. The consumer banking division
of HSBC will focus on the UK, Hong Kong, high-growth markets such as Mexico, Singapore,
Turkey and Brazil, and smaller countries where it has a leading market share. According to
Reuters, Chief Executive Stuart Gulliver told the media, "There will be further job cuts. There
will be something like 25,000 roles eliminated between now and the end of 2013."
In August 2011 "to align our U.S. business with our global network and meet the local
and international needs of domestic and overseas clients", HSBC agreed to sell 195 branches in
New York and Connecticut to First Niagara Financial Group Inc for around $1 billion and
announced the closure of 13 branches in Connecticut and New Jersey. The rest of HSBC's U.S.
network will only be about half from a total 470 branches before divestments. On 9 August 2011,
Capital One Financial Corp. agreed to acquire HSBC's U.S. credit card business for $2.6 billion,
9
netting HSBC Holdings an estimated after-tax profit of $2.4 billion. In September it was
announced that HSBC seeks to sell its general insurance business for around $1 billion.
In 2012, HSBC was the subject of hearings of the U.S. Senate permanent subcommittee
for investigations for severe deficiencies in its anti money laundering practices. On 16 July the
committee presented its findings. Among other things it concludes that HSBC has been
transferring $7 billion in banknotes from its Mexican to its US subsidiary, much of it related to
drug dealing, was disregarding terrorist financing links and was actively circumventing U.S.
safeguards to block transactions involving terrorists, drug lords and rogue regimes, including
hiding $19.4 billion in transactions with Iran.
In July 2012 HSBC came under investigation for allegedly assisting in the money
laundering of drug dealers and terrorist money for many years, after a probe by the US Federal
Reserve and Office of the Comptroller of the Currency found that there was "significant potential
for unreported money laundering or terrorist financing".
On 11 December 2012, HSBC agreed to pay a record $1.92 billion fine in this money
laundering case. "Bank officials repeatedly ignored internal warnings that HSBC's monitoring
systems were inadequate, the Justice Department said. In 2008, for example, the CEO of HSBC
Mexico was told that Mexican law enforcement had a recording of a Mexican drug lord saying
that HSBC Mexico was the place to launder money." The DOJ, however, decided not to pursue
criinal penalties, a decision which the New York Times labelled a "dark day for the rule of law
"We accept responsibility for our past mistakes. We have said we are profoundly sorry for
them, and we do so again." HSBC Chief Executive Stuart Gulliver said.
A 32-page brochure published on the HSBC website provides details of 2012 results in
terms of markets, strategies, and businesses, as well as giving an outline of future plans.
In July 2013, Alan Keir was appointed Chief Executive of HSBC Bank plc after Brian
Robertson resigned from his post. Keir's duties include overseeing the firm's UK, European,
Middle Eastern and African divisions.
10
Since 2013
In June 2014, an indirect wholly owned subsidiary HSBC Life (UK) Limited agreed to sell its
4.2 billion UK pensions business to Swiss Re.
11
FINANCIAL INCLUSION
Education
HSBC partners with nongovernmental organisations across the country, which works with
children from underprivileged communities. Our project support helps children go to school,
learn in a joyful environment and learn to live a healthy life. We also work with young
adults to provide vocational training and life skills so that they are able to help themselves
lead a productive life. At HSBC we believe "Education is key to every success".
Educational initiatives at HSBC provide opportunities to underprivileged children to explore
their untapped potential and equip them with necessary skills and qualifications. Our project
support helps children to go to school, learn in a joyful environment and learn to live a
healthy life. We also work with young adults to provide vocational training and life skills so
that they are able to help themselves lead a productive life.
Life Skills
Life skills programmes supported by HSBC provides tailor made training to underprivileged
youth. Youth are enabled to gain access to opportunities for sustainable livelihoods and
financial literacy to help them lead a productive life.
Womens Empowerment
The plight of women in rural India is well documented. The pressure on survival against the
backdrop of poor or no education, failing health, low agricultural productivity and
degradation of environment, affects women and children the most. In a majority of cases, in
the modern India of today, women are still unable to break out of vicious cycle of gender
bias, deprivation and victimization, imposed on them, sometimes by tradition, and at other
times by their economic environment and compulsions. One way of resolving this dilemma
is to devise financial literacy programmes, which intervene in the lives of rural poor women.
HSBC supports projects that provide entrepreneurial trainings and information access to
make dignified economic opportunities and self-sufficiency a possibility.
The programme aims to nurture leaders around the world and help build global knowledge
with the accompanying expectation that the lifelong careers of the scholarship recipients
will be marked by significant contributions to the community in which they live and work.
Over time, the HSBC Scholars will form an influential international alumni network,
bringing vision and commitment to improving lives of citizens throughout the world. The
scholars are thus expected to use their education for the benefit of others. A total of 15
scholarships have been awarded till date.
started offering commercial loan products to large MFIs also to help them provide micro
credit to the financially excluded in India. These institutions provide small loans to groups
of poor people (mostly women) using wellestablished micro credit delivery methodologies.
We have sanctioned facilities totalling INR 660M between JanApr08 to MFIs and
presently the total number of members covered by MFIs, which have accepted our facilities,
is 3.2M.
In 2008, we have put in place a microfinance strategy, with the objective of increasing our
presence in this segment and building around a lending portfolio, a host of services which
can facilitate capacity building, improve operational efficiency and bring the best practices
of a transactional banking business to the microfinance domain.
Environment
HSBC India supports nature, habitat and biodiversity conservation, water harvesting and climate
change initiatives. These projects are designed to ensure that economic development does not
take place at the expense of the environment and the awareness component ensures that a large
number of varied audiences are exposed to environmental messages.
EMPLOYEE VOLUNTEERING
14
Annual Helping Hands Mela: HSBC employees organises a pan India activity at
HSBC branches to encourage charitable giving through sale of products designed by NGOs
and communities.
Mumbai Marathon 2008: 90 employees ran the Mumbai Marathon and raised
pledges for SPJ Sadhana School for the Developmentally Handicapped, to enable
differentially abled children avail of opportunities to study, experience and enjoy their
childhood thus empowering them to lead a constructive and selfreliant life.
World Environment Day 2008: India was one of the 20 countries within the HSBC
Group that participated in celebrating World Environment Day on 05 June 2008. About 1000
15
Type
(Group Chairman)
Stuart Gulliver
(Group Chief Executive)
Services
Revenue
Operating
US$22.56 billion (2013)
income
Profit
US$16.20 billion (2013)
Total assets
US$2.671 trillion (2013)
Total equity US$181.8 billion (2013)
Employees 254,066 (2013)
HSBC Bank plc, The Hongkong and
Shanghai Banking Corporation,
HSBC GLT India, HSBC Bank USA,
Subsidiaries
HSBC Bank Middle East, HSBC
Mexico, HSBC Bank Brazil, HSBC
Finance, HSBC GLT Malaysia
Website
www.hsbc.com
HSBC Holdings PLC is a British multinational banking and financial services company
headquartered in London, United Kingdom. It is the world's second largest bank. It was founded
in London in 1991 by the Hongkong and Shanghai Banking Corporation to act as a new group
holding company. The origins of the bank lie in Hong Kong and Shanghai, where branches were
first opened in 1865. The HSBC name is derived from the initials of the Hongkong and Shanghai
17
Banking Corporation. As such, the company refers to both the United Kingdom and Hong Kong
as its "home markets".
HSBC has around 6,600 offices in 80 countries and territories across Africa, Asia, Europe, North
America and South America, and around 125 million customers. As of 31 December 2013, it had
total assets of $2.671 trillion, of which roughly half were in Europe, the Middle East and Africa,
and a quarter in each of Asia-Pacific and the Americas. As of 2012, it was the world's largest
bank in terms of assets and sixth-largest public company, according to a composite measure by
Forbes magazine.
HSBC is organised within four business groups: Commercial Banking; Global Banking and
Markets (investment banking); Retail Banking and Wealth Management; and Global Private
Banking.
HSBC has a dual primary listing on the Hong Kong Stock Exchange and London Stock
Exchange and is a constituent of the Hang Seng Index and the FTSE 100 Index. As of 6 July
2012 it had a market capitalisation of 102.7 billion, the second-largest company listed on the
London Stock Exchange, after Royal Dutch Shell. It has secondary listings on the New York
Stock Exchange, Euronext Paris and the Bermuda Stock Exchange.
PROJECTS EDUCATION
HSBC partners with nongovernmental organizations across country that works with
children from underprivileged communities. Our support helps children go to school and
learn in a joyful environment. Some of the educational projects supported by HSBC India
are:
18
SOS Children's Villages: HSBC supports the work of SOS Children's Villages in
New Delhi, Kolkata, Bhuj, Anagpur and Latur. SOS India's mission is to provide abandoned
and orphaned children with a family, a home, education and a foundation for an independent
life.
Child link Foundation (Magic Bus): HSBC supports a group of street children
between the age of 810 years at Magic Bus by facilitating their nonformal education
through outdoor sports, day trips and weekend trips.
Happy Home and School for the Blind, Mumbai: Happy Hope imparts education
for blind and visually impaired children. HSBC provides support to their annual pottery
workshop and exhibition.
Future Hope: is a home and school for street children in Kolkata, supported by
HSBC through annual donations.
Prayas: Prayas works for the care, protection and rehabilitation of neglected street
and working children. HSBC supports the Naya Prayas project in Delhi slums and helps
provide outofschool children with education.
SUPPORT: SUPPORT helps children on street of Mumbai who are prey to drug
abuse, crime and disease by mainstreaming them and offering complete rehabilitation. It
provides an opportunity for better life for these children through education, medical care,
return to families/ parents, vocational training and livelihood assistance.
The Foundation for Mother and Child Health, India: works to improve the lives
of mothers and children in local communities by providing long term programmes focused
on health, nutrition, education, and sustainable skills training programmes.
Welfare Society for the Blind: conducts vocational training programmes for adult
persons with visual disability to equip them with the skills and competence to gain a degree
of economic selfsufficiency.
20
Butterflies, Delhi: has been working with street and working children in Delhi since
1989. The project has started a mobile van service with computer training and
banking/savings facilities for street children at 12 key street children contact points in Delhi.
Navjyoti Delhi Police Foundation, Delhi: was founded by Dr Kiran Bedi and 17
other likeminded officials of Delhi Police. The project being supported is to run seven
libraries for 4000 underprivileged children in the age group of 4 to 16 years.
Yusuf Meherally Centre, Delhi: established in 1961 and working for the welfare of
needy and landless rural people for the last 38 years. A project to provide400
begging/working children in Delhi education, life skills and counselling is being supported.
Salaam Baalak Trust, Mumbai: established in1988 with a portion of the proceeds
from the film "Salaam Bombay!" by Mira Nair. It aims to give street children choices and a
chance to experience the joys of childhood; HSBC is supporting a night shelter at
21
Loreto Day School. Sealdah: 'Off to school programme' a unique project for
homeless children that bring the privileged and the less fortunate together in one classroom.
It is a school in the day and a shelter for girls by night.
Jeevodaya Society, Itarsi: The construction of the shelter for homeless girls from
Itarsi railway station, which serves as a safe and protected environment for these girls.
Shoshit Seva Sangh, Patna: A new residential school known as Shoshit Samadhan
Kendra is being supported to provide education and vocational training to children of the
'Mushar' (rat catcher) community former untouchables living in the outskirts of Bihar
villages.
PRODUCTS OF HSBC
22
23
Coverdell Education
529 College
Savings Accounts
Custodial Accounts
Savings Plans1
(ESAs)
(UGMA/UTMA)
Tax-advantaged
investment account
selected by parent
with state-provided
choices available
Tax-advantaged investment
account in which parents can
choose to invest in mutual
funds3, stocks5, bonds4 and
more
Qualifying college
expenses
Qualifying elementary,
secondary, and college
expenses
Any adult
Yes
No
Maximum
contributions
Annually: $2,000
Forms of
acceptable
funding
Cash
Cash
Tax implications
Contributions
Federal: not
deductible
State: varies by state
24
Coverdell Education
529 College
Savings Accounts
Custodial Accounts
Savings Plans1
(ESAs)
(UGMA/UTMA)
Tax implications
Earnings
Taxed
Expiration age
and transfer
flexibility
Funds may be
disbursed for
qualifying expenses
for a beneficiary of
any age. Transfers to
other family members
are allowed
25
26
Mutual funds1 are a type of pooled investment vehicle. Shareholders of a mutual fund
invest their money by purchasing shares of the fund. The money that they pay for the shares is
pooled together and invested in a portfolio of securities, such as stocks, bonds, or money market
instruments. Mutual funds are professionally managed and operated by money managers, who
maintain the portfolio in accordance with the fund's investments objectives as stated in the
prospectus.
Popular investment disciplines which can involve mutual funds include:
Asset allocation2: a disciplined approach to long-term investing, designed to seek
consistent exposure to markets. This approach does not guarantee a profit or protect
against a loss. It also cannot eliminate the risk of fluctuating prices and uncertain returns.
However, it may be used in an effort to manage risk and enhance returns.
Dollar cost averaging3: a strategy in which securities, typically mutual funds, are
purchased in fixed dollar amounts at regular intervals, regardless of what direction the
market is moving. While this method doesn't guarantee against losses, over time, this can
help to reduce the average cost of acquired shares.
Target date ("life cycle") investing4: investors choose a fund with a specified target
date near a personal need or goal (such as retirement) for which they will need to access
their invested funds. Though target date investing does not protect against loss of
principal, the fund's risk exposure is gradually reduced as a target date draws nearer to
prepare for the approaching liquidity needs.
HSBC Emerging Markets Local Debt Fund, HSBC Frontier Markets Fund, HSBC Total Return
Fund and the HSBC RMB Fixed Income Fund all provide access to some of the world's fastest
growing markets through the lens of HSBC's deep global knowledge and experience.
OPERATIONS
29
HSBC has its world headquarters at 8 Canada Square in Canary Wharf, London.
HSBC has a significant presence in each of the world's major financial markets, with the
Americas, Asia Pacific and Europe each representing around one third of its business. HSBC is
the largest bank in Hong Kong and prints most of Hong Kong's local currency in its own name.
As of 2 April 2008, according to Forbes magazine, HSBC was the fourth-largest bank in the
world by assets (with $2,348.98 billion), the second largest in terms of revenues (with
$146.50 billion) and the largest in terms of market value (with $180.81 billion). It was also the
most profitable bank in the world with $19.13 billion in net income in 2007 (compared to
Citigroup's $3.62 billion and Bank of America's $14.98 billion in the same period). In June 2006,
The Economist stated that since the end of 2005 HSBC has been rated the largest banking group
in the world by Tier 1 capital. In June 2014 The Banker ranked HSBC first in Western Europe
and 5th in the world for Tier 1 capital. In February 2008, HSBC was named the world's most
valuable banking brand by The Banker magazine.
HSBC is known for a conservative and risk-averse approach to business a company
tradition going back to the 19th century. This reputation has been brought into question in the
21st century.
In its technical management, however, HSBC has recently suffered a series of headlinemaking incidents in which some customer data were allegedly leaked or simply went missing.
Although the consequences turned out to be small, the embarrassing effect on the group's image
did not go unnoticed.
HSBC is currently audited by one of the Big Four auditors, KPMG. The HSBC and
KPMG headquarters are adjacent to one another, with KPMG occupying 15 Canada Square.
HSBC Main Building, Hong Kong is also adjacent to KPMG office located in Prince's Building.
A decision on 2 August 2013 made public that PricewaterhouseCoopers will take on the HSBC
audit in 2015.
In the six months to 30 June 2014, the bank reported a 7.33 billion ($12.34 billion) profit before
tax, down from $14.07 billion for the comparable period in 2013.
30
Principal subsidiaries
Asia Pacific
Europe
HSBC France
31
HSBC Bank International the offshore banking arm of the HSBC Group, focusing on
providing offshore solutions and cross border services to expatriates and migrants. It
provides a full range of multi-currency personal banking services to a range of customer
segments, including a full internet banking and telephone banking service. Sometimes
referred to as "HSBC Offshore", the business also offers independent financial planning,
and has representative offices all over the world, often working alongside local HSBC
operations in those regions. HSBC Bank International originated from the business
started by Midland Bank and is based in the Channel Islands with further operations on
the Isle of Man. Its operations in the Channel Islands are centred around its headquarters
on the seafront in St Helier, Jersey.
Americas
The headquarters of HSBC Brazil in Curitiba
Commercial Banking
HSBC provides financial services to small, medium-sized and middle-market enterprises.
The group has more than 3 million of such customers, including sole proprietors, partnerships,
clubs and associations, incorporated businesses and publicly 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
corporate banking, investment banking, capital markets, trade services, payments and cash
management, and leveraged acquisition finance. It provides services in equities, credit and rates,
foreign exchange, money markets and securities services, in addition to asset management
services.
Global Banking and Markets has offices in more than 60 countries and territories worldwide, and
describes it as "emerging markets-led and financing-focused".
33
Global Banking and Markets is currently being led by former fixed-income trader Samir Assaf,
who was promoted from global head of markets on 10 December 2010.
35
HSBCnet
HSBCnet is a global service that caters to local business needs by offering specialised
functionality for different regions worldwide.
The system provides access to transaction banking functionality ranging from payments
and cash management to trade services features as well as to research and analytical content
from HSBC. It also includes foreign exchange and money markets trading functionality.
36
The system is used widely by HSBC's high-end corporate and institutional clients served
variously by the bank's global banking and markets, commercial banking and global transaction
banking divisions.
HSBCnet is also the brand under which HSBC markets its global e-commerce
proposition to its corporate and institutional clients.
HSBC Advance
HSBC Advance is the group's product aimed at working professionals. The exact benefits
and qualifications vary depending on country, but typically require a transfer of Salary of USD
1,500 or more every month or Maintain USD 25,000 of deposits in a Savings/Current Account or
investments. Advantages may vary depending on country, such as day-to-day banking services
including but not limited to a Platinum Credit Card, Advance ATM Card, Current Account and
Savings Account. Protection plans and Financial Planning Services. A HSBC Advance customer
enables the customer to open accounts in another country and transfer their credit history.
HSBC Premier
HSBC Premier is the group's premium financial services product, comparable to the
Centurion service of American Express. It has its own Elite Card entitled HSBC Premier World
Card. The exact benefits and qualification criteria vary depending on country. Customers have a
dedicated Premier Relationship Manager, global 24-hour access to call centres, free banking
services and preferential rates.
37
We believe a company that behaves ethically, responsibly and believes in sustainability will
ultimately be more successful than its competitors because it addresses issues on which its long
term success depends, and thereby gains the confidence of investors, customers and employees.
The companies that will be our sector's leaders in five, 10 and 50 years time already know that a
commitment to environmental and social sustainability is not a secondary issue; it is a defining
strategy that will help build financially successful global companies of the future.
Our goal is not, and never has been, profit at any cost because we know that tomorrow's success
depends on the trust we build today.
We look to address the expectations of our customers, shareholders, employees and other
stakeholders. Our frequently asked question covers a range of issues including the size of
HSBCs profits, customer indebtedness and executive pay.
Being one of the worlds biggest banks means the decisions we make can have a big
impact. We aim to lend and invest responsibly, avoiding projects where the potential for social
and environmental damage outweighs the economic benefits.
Companies like ours must share responsibility for the environment with governments and
citizens for minimising the damaging effects of human activity pollution of land, water and air
and the depletion of resources.
The world is a rich and diverse place. The better our people reflect this diversity, the
better we can anticipate and meet our customers needs.
Involving our employees in the community brings many benefits. Our employees gain
understanding, confidence and selfesteem. Being recognised in the community also helps
HSBC to attract great people.
39
MONEY LAUNDERING
Money laundering has been an issue in Argentina, India, the United Kingdom and the
United States.
Following search warrants and raids beginning in January 2013, in mid-March 2013
Argentina's main taxing authority accused HSBC of using fake receipts and dummy accounts to
facilitate money laundering and tax evasion.
On 19 July 2012, India assured to get to the bottom of alleged violation of safety
compliance, in which Indian employees are presumed to be involved. On 9 November 2012,
Indian activist and politician Arvind Kejriwal claimed he had details of 700 Indian bank accounts
hiding black money with a total value of 60 billion (US$980 million) with HSBC in Geneva. In
June 2013, a media outlet in India did an undercover expose where HSBC officers were caught
on camera agreeing to launder "black money." HSBC placed these employees on leave pending
their own internal investigation.
In early February 2013, appearing before UK's Parliamentary Banking Standards
Commission, CEO Stuart Gulliver acknowledged that the structure of the bank had been "not fit
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for purpose." He also stated, "Matters that should have been shared and escalated were not
shared and escalated." HSBC has also been accused of laundering money for terrorist groups.
In both 2003 and 2010, U.S. regulators ordered HSBC to strengthen its anti-money
laundering practices. In October 2010, the United States OCC issued a Cease and Desist Order
requiring HSBC to strengthen multiple aspects of its Anti-Money Laundering (AML) program.
The identified problems included a once massive backlog of over 17,000 alerts identifying
suspicious activity, failure to file timely suspicious activity reports with U.S. law enforcement,
failure to conduct any due diligence to assess risks to HSBC affiliates before opening
correspondent accounts for them, a three-year failure by HBUS from mid-2006 to mid-2009 to
conduct any AML of $15 billion in bulk cash transactions from those same HSBC affiliates,
failure to monitor $60 trillion in annual wire transfers by customers in countries rated lower risk
by HBUS, and inadequate and unqualified AML staffing, resources, and leadership. It was noted
that HSBC fully cooperated with the Senate investigation.
In November 2012 it was reported that HSBC had set up offshore accounts in Jersey for
suspected drug-dealers and other criminals, and that HM Revenue and Customs had launched an
investigation following a whistleblower leaking details of 700 million allegedly held in HSBC
accounts in the Crown dependency .
In December 2012, Assistant U.S. Attorney General Lanny Breuer suggested that the U.S.
government might resist criminal prosecution of HSBC which could lead to the loss of the bank's
U.S. charter. He stated, "Our goal here is not to bring HSBC down, it's not to cause a systemic
effect on the economy, it's not for people to lose thousands of jobs."
In December 2012, HSBC was penalized $1.9 billion (US), the largest fine under the
Bank Secrecy Act, for violating four U.S. laws designed to protect the U.S. financial system.
HSBC had allegedly laundered at least $881 million in drugs proceeds through the U.S. financial
system for international cartels, as well as processing an additional $660 million for banks in US
sanctioned countries. According to the report, "The U.S. bank subsidiary [also] failed to monitor
more than $670 billion in wire transfers and more than $9.4 billion in purchases of physical
dollars from its Mexico unit." As part of the agreement deferring its prosecution, HSBC
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acknowledged that for years it had ignored warning signs that drug cartels in Mexico were using
its branches to launder millions of dollars, and also acknowledged that HSBC's international staff
had stripped identifying information on transactions made through the United States from
countries facing economic sanctions such as Iran and Sudan.
A February 2013 article in Rolling Stone magazine, which was critical of what they
regarded as the timid response by the U.S. Justice Department, stated "Yes, they issued a fine
$1.9 billion, or about five weeks' profit but they didn't extract so much as one dollar or one day
in jail from any individual, despite a decade of stupefying abuses" and further stated, "In this
case, the bank literally got away with murder well, aiding and abetting it, anyway." A
December 2012 CNNMoney article compared the 1.9 billion dollar fine to HSBC's profit "last
year" (2011) of 16.8 billion.
OTHER CONTROVERSIES
In the report titled "In the Future There Will Be No Forests Left" produced by Global
Witness, the bank is also being accused of supporting the seven largest Malaysian timber
conglomerates which are responsible for rapid deforestation in the Malaysian state of Sarawak
without any FSC certifications. However, the bank declined to divulge its clients on this issue,
citing the confidentiality of its clients; but the bank maintains that the accusations that its clients
violate forestland and forest-products policy is not accurate.
HSBC also held billions of dollars of assets for the Libyan Investment Authority, which
was controlled by Colonel Muammar Gaddafi; after Gaddafi's overthrow and assassination, the
bank refused to reveal information about the funds, citing customer confidentiality.
In 2014 HSBC refused to allow customers to withdraw large cash amounts without a
third-party letter confirming what the money would be used for. Douglas Carswell, the
Conservative MP for Clacton, was alarmed by the HSBC policy: "All these regulations which
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have been imposed on banks allow enormous interpretation. It basically infantilises the customer.
In a sense your money becomes pocket money and the bank becomes your parent."
In 2014 HSBC closed North London Central Mosque's account and some muslim clients
and group's accounts. Several sources report that HSBC closed them because they donated their
money to Palestine during the massacring.
LOGO
The group announced in November 1999 that the HSBC brand and the hexagon symbol would
be adopted as the unified brand in all the markets where HSBC operates, with the aim of
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enhancing recognition of the group and its values by customers, shareholders and staff
throughout the world.
The hexagon symbol was originally adopted by the Hongkong and Shanghai Banking
Corporation as its logo in 1983. It was developed from the bank's house flag, a white rectangle
divided diagonally to produce a red hourglass shape. Like many other Hong Kong company flags
that originated in the 19th century, and because of its founder's nationality, the design was based
on the cross of Saint Andrew. The logo was designed by Austrian graphic artist Henry Steiner.
SPONSORSHIPS
The 2004 Jaguar Racing Formula One car, being driven by Mark Webber
Having sponsored the Jaguar Racing Formula One team since the days of Stewart Grand
Prix, HSBC ended its relationship with the sport when Red Bull purchased Jaguar Racing from
Ford. HSBC has now switched its focus to golf, taking title sponsorship of events such as the
HSBC World Match Play Championship, HSBC Women's World Match Play Championship
(now defunct), HSBC Champions and HSBC Women's Champions.
In football HSBC sponsors French club AS Monaco and Mexican club C.F. Pachuca, and
in rugby league, HSBC sponsors Telford Raiders in the Rugby League Conference. In Australia,
HSBC sponsors the New South Wales Waratahs rugby team in Super Rugby rugby union
competition, as well as the Hawthorn Football Club in the Australian Football League.
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HSBC's other sponsorships are mainly in the area of education, health and the
environment. In November 2006, HSBC announced a $5 million partnership with SOS Children
as part of Future First.
HSBC sponsors the Great Canadian Geography Challenge, which has had around
2 million participants in the past 12 years. Since 2001, HSBC has sponsored the Celebration of
Light, an annual musical fireworks competition in Vancouver, British Columbia, Canada. In 2007
HSBC announced it would be a sponsor of the National Hockey League's Vancouver Canucks
and Calgary Flames. HSBC has also sponsored a professional gaming team that was disbanded
late 2007. HSBC is also committed to local sponsorships, the Mandarins Cricket Club being one
example.
HSBC sponsored the 2009 British and Irish Lions tour to South Africa.
HSBC is the official banking partner of the Wimbledon Tennis Championships, providing
banking facilities on site and renaming the Road to Wimbledon junior event, as the HSBC Road
to Wimbledon National 14 and Under Challenge.
HSBC was named the 'Official Banking Partner' of the Open Championship, in a fiveyear deal announced in 2010.
In October 2010, the International Rugby Board announced that they had concluded a 5year deal with HSBC which granted them status as the first ever title sponsor of the IRB Sevens
World Series. Through the accord, HSBC is paying more than $100 million for the title naming
rights to all the tournaments in the IRB Series, beginning with the Dubai Sevens on 3 December
2010, and ending in the spring of 2015. HSBC opted to sub-license the naming rights to all but
one of the individual tournaments, while retaining its name sponsorship of the overall series as
well as co-sponsorship (with Cathay Pacific) of the world's most famous 7-a-side rugby
tournament, the Hong Kong Sevens.
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COMPANY OVERVIEW
HSBC Bank USA, N.A. provides commercial banking products and services to
individuals, corporations, institutions, and government agencies. It offers personal financial
services, including installment and revolving term loans, deposits, branch services, mutual funds,
investments, and insurance, as well as residential mortgage lending services through direct retail
and wholesale origination channels. The company also provides private banking services for high
net worth individuals and families, including deposits, tailored credit and banking, investment
management, trust and estate administration, custody, and retirement services, as well as wealth
and tax advisory, philanthropy, family office...
Mclean, VA 22101
United States
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Founded in 1850
Phone: 716-841-7212
Fax: 716-841-2034
www.us.hsbc.com
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HSBC Bank USA for $250 million over the lender's alleged role in SLS Capital's sale of
so-called 'death bonds'. The complaint filed in the U.S. District Court in Manhattan alleged that
the lender ignored signs of suspicious activity carried out by late British entrepreneur David
Elias through Keydata Investment Services, an investment vehicle he controlled. HSBC served
as a custodian of life insurance policies that backed bonds sold by SLS Capital, according to the
suit. The bonds were falsely marketed as safe.
HSBC North America Holdings Inc., HSBC USA Inc. and HSBC Bank USA, N.A.
Announces Executive Changes, Effective June 30, 2014
Patrick (Pat) Burke (52) has been appointed Executive Director of HSBC North America
Holdings Inc., HSBC USA Inc. and HSBC Bank USA, N.A. with effect from 30 June 2014.
Burke succeeds Irene Dorner (59), who will retire after a distinguished 32-year career at HSBC.
Burke was appointed Chief Executive of HSBC Finance Corporation in 2010, assuming
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responsibility for winding down the legacy Household consumer finance business. Rhydian Cox
(53) has been appointed xecutive Director of HSBC North America Holdings Inc., HSBC USA
Inc., HSBC Bank USA, N.A with effect from 30 June 2014. Cox will report to the Chief
Executive of HSBC US and to Marc Moses, Executive Director and Group Chief Risk Officer.
Cox will chair a new US Remediation Committee which will drive the regulatory remediation of
high-risk items, including significant control items. Cox was appointed Chief Risk Officer, AsiaPacific in 2008. He joined the Group in 1984 and was appointed a Group General Manager in
2013.
HSBC Bank USA NA Appoints Thomas Hou as Managing Director of Debt Finance
Origination for U.S. Commercial Bank
May 9, 2014
HSBC Bank USA NA appointed Thomas Hou managing director of debt finance origination for
the U.S. Commercial Bank. Hou will be responsible for helping the company's commercial
banking clients access bank financing. He will work with Andy Smith, head of debt finance
origination for the U.S. Commercial Bank. Both report to Martin Brown, executive vice
president and head of large corporate banking. Hou joins from Barclays Plc, where he served as a
managing director with the high-grade loan syndicate.
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CONCLUSION
As long as the wider economic situation remains doubtful, it is advisable
for HSBC to adopt a wait-and-see approach - and a careful look at their
businesses, stress testing them for both economic downturn and full-blown
recession. And it would be useful to factor in the wider commercial and
operational impacts through combined risk, valuation, economics, operations
and HR teams. Certainly, for financial services firms like HSBC, crisis
management still necessary in the form of asset and portfolio revaluation on a
mark-to model basis for both management and constitutional accounting
purposes - and this may need some independent validation.
Within the last decade the best consumer bank HSBC garnered awards
along with soaring rankings. This was just one of those awards won by the
HSBC in its excellent performance. Such achievements, rankings, and awards
can be directly resulting from HSBC's business strategies. As the last
decade's success is not ever lasting due to increased competition in the
industry facilitated by globalization, trade liberalization rather is become more
difficult for the corporation to maintain its leading position through offering the
excellence in the service. The company needs to add diverse values to its
strategy to establish its position in the target segment.
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BIBLIOGRAPHY
BOOKS
KOTLER PHILIP : Marketing in New Millenium, Millenium Edition Prentince Hall Of
India, New Delhi
C.R. Kothari : Research Methology; Wishva Publication, New Delhi.
M.J Methew : Risk & Insurance Management.
MAZAGINES
Business World
Invest One
Business Today
Invest Time By TATA-AIG
Fund Fact Sheets Of Reliance Mutul Fund
Offer Documents Of Different Schemes
WEBSITES
http://en.wikipedia.org
www.hsbc.com
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