Oligopoly profile: HSBC
London-based HSBC is one of the top banking companies in the world. It is #2 after Citigroup, but may slip to #4 after the J.P. Morgan-Bank One and Bank of America Fleet deals are done. The company is truly global, with operations in almost every country in the world.
HSBC started its life half a world away, as its original name (Hongkong and Shanghai Banking Corporation Limited) indicates. The company reaches back to 1865, and it was initially in the business of financing European-Chinese trade. It soon expanded to Japan, the Philippines, and Thailand (where it was the first bank established). By the end of the 19th century, the bank was the largest in Asia.
After steady growth in the early 20th century, HSBC nearly went out of business in mid-century. The Japanese roll through Asia saw much of the bank captured and its president imprisoned. Recovering after the war, it lost its mainland China operations with the advent of communism. Fortunately, it reestablished its Hong Kong operations and was raised with the postwar boom in that city. In the 1950s and 1960s it expanded its range, by acquiring the Mercantile Bank (with operations in India), Hang Seng bank (Hong Kong), The British Bank of the Middle East, and the Shanghai Banking Corporation of California (US).
Major expansion internationally continued in the 1980s with the acquisition of the Marine Midland Bank (US) and a major share of the Midland Bank (UK), which it bought fully in the 1990s. Also in the 1990s it established a unified brand for all its banks (HSBC) and also increased its presence in London.
In the past few years it has pursued new acquisitions across the globe with determination. Recent acquisitionsinclude:
1999 Republic New York (US), with a substantial presence in New York City
Mid-Med Bank (Malta)
2000 Credit Commerciale de France (CCF)
PCIB Savings Bank (Philippines)
2001 Demirbank (Turkey)
NRMA Building Society (Australia)
China Securities Investment Trust (Taiwan)
2002 Grupo Financero Bital (Mexico)
2003 Household International (US)
Banque Eurofin (France)
Asset Management Technology (South Korea), an investment comp[any
Keppel Insurance (Singapore)
Remaining 40% of Equator Holdings, an African-based bank with offices in Angola,
Cote d'Ivoire, Ghana, Mozambique, South Africa and Uganda
2004 Intesa Bank (Canada)
Bank of Bermuda
The Household Finance acquisition was quite significant. HFC is the second largest consumer lender (homes, mortgages) in the US, after Citigroup. It is also a major issuer of credit cards. While the company is still digesting the HFC move, it is considered to be in the market for a regional US bank, trying to expand beyond its New York state base. As the US industry consolidates, there will be few such opportunities left in a few years.
HSBC is poised to grow. It has a strong expertise and growing presence in mainland China, the fastest growing economy in the world, and the world presence to handle international trade agreements with that country and others. It has a big presence in international banking havens (Switzerland, the Channel Islands, Panama, and, recently, Bermuda) for its numerous private banking clients. Like several of its main competitors, it has far more influence about where money circulates and ends up than any national government.
Principal HSBC Divisions
