History of Hongkong and Shanghai Banking Corporation Limited

The Hongkong and Shanghai Banking Corporation Limited opened in Hong Kong on 3 March
1865 and in Shanghai one month later. It was the first locally owned bank to operate according to
Scottish banking principles.
By 1875 HSBC was present in seven countries across Asia, Europe and North America. It
financed the export of tea and silk from China, cotton and jute from India, sugar from the
Philippines and rice and silk from Vietnam.
By 1900, after strong growth under Chief Manager Thomas Jackson, the bank had expanded into
16 countries and was financing trade across the world. Bullion, exchange and merchant banking
were important features of the banks business.
In the early 20th century, HSBC widened the scope of its activities in Asia. It issued loans to
national governments to finance modernization and infrastructure projects such as railway
building.
The First World War brought disruption and dislocation to many businesses. By the 1920s,
however, Asia was beginning to prosper again as new industries developed and trade in
commodities such as rubber and tin soared.
The 1930s brought recession and turmoil to many markets. Nonetheless, HSBC asked architects
Palmer and Turner to design a new head office in Hong Kong: Please build us the best bank in
the world. The cutting-edge art deco building opened in 1935.
The bank faced one of its most challenging times during the Second World War. Staff in Asia
showed huge courage in the face of adversity. Many became prisoners of war. Only the London,
Indian and US branches remained in full operation.
At the end of the war, HSBC took on a key role in the reconstruction of the Hong Kong
economy. Its support helped established manufacturers as well as newcomers to Hong Kong
grow their business.

By the 1970s the bank had expanded through acquisition. HSBC bought Mercantile Bank and
The British Bank of the Middle East in 1959. In 1972 it formed a merchant banking arm,
extending its range of services.
In the 1980s HSBC bought Marine Midland Bank in the US. In 1992, the newly created HSBC
Holdings plc made a recommended offer for full ownership of the UKs Midland Bank.
Following the acquisition, HSBC moved its headquarters to London.
In 1998, the bank announced it would adopt a unified brand, using HSBC and the hexagon
symbol everywhere it operated.
As new markets blossom and flourish, HSBC continues to be where the growth is, connecting
customers to opportunities. The bank enables business.

HSBC in Bangladesh
In Bangladesh, the HSBC Groups history dates back to 1996 when The Hong Kong and
Shanghai Banking Corporation (HSBC) Ltd opened its first branch. Today, the HSBC Group
offers a comprehensive range of financial services in Bangladesh including commercial
banking, consumer banking, payments and cash management, trade services, treasury, and
custody and clearing. HSBC Bangladesh started its operation on 17 December 1996 in Dhaka
with a vision to satisfy its customers with high quality service that reflects its global image as
the premier International Bank. In 1999 it has opened one Branch in Chittagong and two
Booths in Gulshan and Motijheel. Recently, another Branch has started operating from 2
March 2003 in Dhanmondi. All of these offices were inaugurated by Mr. David G. Eldon
Chairman HSBC Asia Pacific, during his visit in February 1999 and March 2003. HSBC
Bangladesh also has an Offshore Banking Unit, which provides banking services for foreign
companies based in the Export Processing Zones in Dhaka and Chittagong. HSBC Bangladesh
also introduced the ATM and telephone banking facilities for personal Banking business.

HSBCs operations in Bangladesh

1. Personal Banking: With a network of 13 offices, 39 ATM, 9 Customer Service Centers,
an offshore banking unit, and offices in 7 EPZ, HSBC offers a full range of personal
banking and related financial services including current and savings accounts, personal
loans, time deposits, travelers cheques and inward and outward remittances.
2. Commercial banking: Commercial banking is a traditional strength of the HSBC
Group. In Bangladesh, HSBC is a popular choice for customers because of the Groups
international reach and a wide range of financial services and products. HSBC has an
offshore banking unit (OBU) license and can therefore also provide foreign currency
financing to qualifying customers. In addition, there are 7 business development centers
in the countrys major 7 EPZ areas including Dhaka, Chittagong, Adamjee, Mongla,
Comilla, Karnaphuli and Ishwardi.
3. Corporate and institutional banking: Corporate and institutional banking provides
dedicated relationship management services to HSBCs bank ltd clients in major
corporate and financial institutions. The Banks focus is on fostering long-term
relationship based on its international connections and extensive knowledge of Asia and
Asian business.
4. HSBC net: HSBCnet, a proprietary computer-based software package, provides
customer with an instant link into the HSBC Groups international computer network,
allowing them to perform transactions and obtain a diverse range of up-to-date
information 24 hours a day, 365 days a year.
5. Trade & Supply Chains: Trade finance and related services are a long-standing core
business of HSBC based on the depth and spread of its corporate customer base, highly
automated trade processing systems and extensive geographic reach.
6. Payments and cash management: HSBC bank ltd is one of the leading providers of
payments and related services to financial institutions, corporate and personal
customers in Bangladesh. Underpinned by the Groups extensive network of offices and
capabilities, payments and cash management assists companies in efficient cash
management through the provision of payments, collections, and liquidity and account
services.

7. Custody and clearing: HSBC bank ltd is a leader in custody and clearing in the Asia
Pacific region and the Middle East. The network uses advanced securities clearing
system, which was developed in-house and provides round-the-clock online real-time
access to clients securities portfolios.
8. Investment banking and markets: This division brings together the advisory, financing,
asset management, equity securities, private banking, trustee, private equity, and
treasury and capital market activities of the HSBC Groups.
9. Treasury and capital markets: HSBCs treasury and capital markets business ranks
among the largest in the world and serves the requirements of supranational, central
banks, international and local corporations, institutional investors, and financial
institutions as well as other market participants.
10. Amanah: HSBC Amanah is the global Islamic financial services division of the HSBC
Group, responsible for the development of Islamic financial products for distribution to
customers of the HSBC Group. It was established in 1998 and is now based in Dubai,
UAE with regional offices in the UK, USA, Saudi Arabia, Malaysia, Indonesia,
Bangladesh, Singapore and Brunei. HSBC Amanah Bangladesh offers investment
opportunities through Mudarabah Term Investment (Islamic deposit); and vehicle,
personal, and home financing solutions. HSBC Amanah offers you an ideal opportunity
to enjoy Sharia compliant products while benefiting from the global expertise and
world class service standards of HSBC
Key business areas:

Personal Financial Services

Commercial Banking

Corporate and Institutional banking

Global Markets

Shariah Compliant Banking

Products & Services

HSBC Bangladesh carries out all traditional functions, which a commercial Bank performs such
as mobilization of deposit, disbursement of loan, investment of funds, financing export & import
business, trade & commerce & so on. Besides it also offers some specialized services to its
customers. Products & services offered by HSBC can be categorized according to the customers
they serve. Thus two major groups can be identified. They are individual customers or
consumers & corporate customers or organizations. An in-depth analysis of HSBCs product and
services in Bangladesh is presented in this section. First of all, the liability products of the bank
are discussed. After that the various products and services of personal banking division will be
presented, followed by a brief discussion of the corporate banking services offered to corporate
clients. The summary of all the products and services of HSBC Bangladesh is displayed in the
following page.
Accounts
Savings Accounts:
Maximize wealth with daily interest-Unlike other banks there is no ledger fee and any interest
accrued is not lost
Customers can issue any number of cheque or withdraw any amount
Interest is calculated on daily credit balance (not on average credit balance) and paid half yearly
Only condition to earn interest is maintaining a minimum balance of BDT 25,000/Relationship fee is BDT 300/- per quarter if average relationship falls below BDT 50,000/- for
three months.
Current Account:

This is also a depository account basically designed for various customers. This is a non- interest
bearing accounts and the features of this account are as follows:
Opening balance TK 25,000
Average balance that should be maintained: TK 25,000
No restrictions on number of transactions
No yearly ledger fee
Non interest bearing
Free ATM card and phone banking service
Documentation: various kinds of documents are needed for the companies such as memorandum
of association, board resolution, etc. however the requirements for individuals are same as the
savings account.
Can be opened only by:

Individuals (joint or single)

Proprietorship companies

Partnership companies

Limited Companies

Liaison offices

NGOs
ATM Card
Can be linked with Savings or Current Account or both

24 Hours a day from any one of the 11 HSBC ATM outlets DAK, DMO, DGU, DHA and CHG
onsite & 5 offsite.
Maximum limit BDT 20,000/- per day per card. For PVA ATM card the maximum limit is BDT
50,000/- per day.
You can withdraw or deposit money, inquire about your balance, check last 5 transactions,
transfer funds between your accounts and make payments to other accounts with HSBC
Minimum BDT 500/- can be withdrawn;
Power Vantage
For total financial controlAverage deposit balance should be BDT 2,00,000/Annual fee BDT 500/Penalty charge BDT 500/- half yearly, if the average deposit balance falls below BDT 2,00,000/Free personal accident insurance coverage for BDT 1,00,000/Free endorsement of foreign currency against travel quota
Special Power Vantage ATM card with enhanced cash withdrawal facility of BDT 50,000/- per
day
An all-in-one composite statement of all your accounts under the Power Vantage package
Special loan rages for the Personal Installment Loan
Lower processing fee for Car Loan
Fee waiver for setting up standing instructions at Auto Sweep

Time Deposit
Minimum amount to open a TMD is BDT 1, 00,000/- (Individual and Joint both)
Interest is paid at maturity
Cumulative Time Deposits (Principal + Interest) is also available
Automatic roll over at prevailing rate
Time deposit is offered in Time Period (Minimum 1 month and Maximum 12 months)
Standing instruction can be given (like credit interest to other accounts)
Personal Secured Loan a loan facility up to 90% of the value of the LCY and 80% of FCY time
deposit for a maximum period of 5 years
Personal Secured Credit an overdraft facility up to 90% of the value LCY and 80% of the time
deposit.
Short Term Deposit (STD):
These accounts are opened mostly by the organizations. Organizations normally maintain current
accounts in the banks. They need to transact bulk amount regularly thats why, current account
fits with their requirements. As current accounts do not provide any interests and as the
organizations cannot have savings account, they are deprived of earning any interest even though
having huge deposit in their accounts. Short-term deposit accounts enable them to earn interests
from their accounts. These kinds of accounts share some properties of both current and savings
accounts. The account provides interests, which are like the savings accounts, and the holder can
withdraw any amount any time from his account that is a property of the current account.
Individuals especially, businessmen also maintain such accounts.
Fixed Deposit:

It is also known as term deposits. These deposits are made in the bank for a fixed period of time.
This period of time should be specified in advance. The bank needs not to maintain cash reserves
against these deposits & therefore, it offers interest rates that are higher than the savings
accounts.
Monthly Interest Bearing Time Deposit:
The simple, safe, and flexible way to enjoy guaranteed monthly returnMinimum opening amount is BDT 5,00,000/- (Individual and Joint both)
Tenure: 1-2 years
Interest is paid at a monthly basis and is transferred to another nominated account
Automatic roll over for the 2nd year at prevailing rate.
Expatriate Account
Expatriates can open normal BDT current a/c as well as FCY current a/c
Expatriates can open convertible account if entitled to and subject to restrictions such as they can
not deposit taka in convertible A/C
Free ATM card is provided to access to their accounts to withdraw Taka from current accounts
Expatriates can not earn interest on their BDT or FCY accounts (Regulations of Bangladesh
Bank)
Expatriates can not get any credit facilities (Regulations of Bangladesh Bank)
Non-Resident Bangladeshi (NRB)
There are some other accounts for non- resident Bangladeshi

Foreign Currency Current Account

Foreign Currency Time Deposit Account
Resident Bangladeshi
Resident Foreign Currency Current Account:
FeaturesAccounts opened from funds brought in when returning from abroad
If amount exceeds USD 3,000/- or equivalent then customer must fill up declaration form FMJ at
the customs.
To be opened within 30 days of return
Minimum opening balance is USD/GBP/EURO 1,000/An International ATM card giving access to their funds from 8, 00,000/- ATMs worldwide.
Withdrawal in local currencies.
The balance of the account is freely remittable but no inward remittance is allowed.
Non-chequeable account cheque book will not be issued.
Can take out the money for further traveling without being subject to any regulations.
Foreign Currency Time Deposit Account:
FeaturesAccounts opened from funds brought in when returning from abroad or by transferring from
resident FCY account
To be opened within 30 days of return

Minimum opening balance is USD/GBP/EURO 1,000/Interest bearing time deposit account with maturities of 1, 3, 6 and 12 months.

Loans & Credits

Personal Installment Loan (PIL)

Any purpose loan no cash security

Minimum monthly income BDT 15,000/-, 2 years service in a well reputed, stable
company, minimum age 25 and maximum 56

Valid income proof documents must be furnished, unsecured loan, & no personal
guarantee required

Minimum loan amount is BDT 50,000/- and maximum loan amount is BDT
20,00,000/- or 4 times of salary

Interest rate will be 18% per annum

Maximum loan tenure is 36 months. If loan amount it BDT 4, 00,000/- or above then
maximum tenure is 48 months

Auto Pay customers will get discounted interest rate: 15.5% and loan amount: 6 times
of salary or 2 million whichever is lower

CEPS customers will get discounted interest rate: 15.5% and loan amount: 10 times of
salary or 2 million whichever is lower

Personal loans will be granted at discounted rates to employees of blue chip companies
against assignment of terminal benefits as per agreement with employer. Loan tenure
will be up to 5 years.

For salaried individuals additional income including rent will be considered, provided
these are substantiated with requisite documentation or evidence.

For businessmen the TIN certificate and CIB (Credit Information Bureau) report will
remain a mandatory document for income verification.

A current account needs to be opened by the customer before applying for Personal
Installment loan (PIL).

Travel Loan
Travel Loan is offered within the existing Personal Installment loan structure. The purpose of
launching this product is to attract and aid customers with their travel related services.

Loan amount is minimum loan amount is BDT 50,000/- and maximum loan amount is
BDT 5,00,000/-

Interest rate: 15%

Tenure: Maximum loan tenure is 36 months. If loan amount is BDT 4,00,000/- or

above then maximum tenure is 48 months.

Loan processing fee: 1% of the loan amount or BDT 1,000/- whichever is higher +
stamps BDT 170/-

No personal guarantee is required

Car Loan

Eligibility- minimum monthly income BDT 20,000/-, 2 years service in a well reputed,
stable company, minimum age 25 and Maximum 56

Valid income proof documents must be furnished

No personal guarantee is required

Minimum loan amount is BDT 50,000/, maximum is 4,00,000/-

For both reconditioned car and new car loan amount will be maximum 70% of the car
value

Interest rate will be 14.5% per annum

Maximum loan tenure is 60 months

Loan processing fee is 1% of the loan amount or BDT 1,000/- whichever is higher +
stamps BDT 170/-

Car will be registered in Banks name (no joint registration)

Comprehensive insurance in discounted rate from selected insurance company in

Banks name is mandatory and automatically debited from customers account every
year.

CEPS salaried customers will get 0.5% discount in loan processing fee, i.e. 14%

Home Loan
Its easier than ever to own a dream home-

Eligibility- minimum monthly income BDT 40,000/-, 2 years service in a well reputed,
stable company, minimum age 25. The loan must end before borrowers age reaching
57 years or retirement date, which ever is earlier.

This loan is provided for completed flats / apartments less than 20 years of age

No personal guarantee is required

Minimum loan amount is BDT 7,50,000/- and maximum loan amount is 100,00,000/-

Maximum loan tenure is 15 years, loan must be repaid prior to 57 years of age

A maximum loan amount of 70% of the total value of the apartment costing up to BDT
50,00,000/- and 60% of the total value for the apartments over BDT 50,00,000/-. The
total loan value is inclusive of the registration cost.

Interest rate is 14% per annum

Loan processing fee is 1.5% of the loan amount or BDT 20,000/- whichever is higher
+ stamp charge

Security: Registered mortgage and original title deed

Insurance: Fire, earthquake, flood, cyclone

Personal Secured Loan

Personal Secured Loan is a simple stand by loan against the Time Deposit and NRB Bonds and
the loan is repayable in equal monthly installment.

Standby loan against TMD and NRB bonds (WEDB/USDB)

WEDB (Wage Earners Development Bond) or USDB (US Dollar Bond) issued from
HSBC and other multinational banks are considered.

Interest rate 12.5% for loan amount below BDT 5,00,000/- and 12% for loan amount
of BDT 5,00,000/- and above

Interest rate against LCY TMD is 13%

Minimum loan amount BDT 90,000/-

Maximum loan amount 90% of LCY TMD amount or WEDB and 80% of FCY TMD
or USDB

Processing fee against certificate issued from HSBC is BDT 1,000/- + stamps BDT
170/-

Personal Secured Credit

Credit facility against the investmentsPersonal Secured Credit is a credit facility against Time Deposits and NRB Bonds that enables
customers to have the flexibility to meet short-term commitments without unlocking their longterm investments.

Customers can borrow up to 90% of their LCY TMDs and WEDB value

WEDB and USDBs issued from HSBC and other multinational banks are considered

Minimum loan amount is BDT 90,000/-

Maximum loan amount 90% of LCY TMD amount or WEDB and 80% of FCY TMD
or USDBs.

Credit Card
Increase the spending powerProduct Name: HSBC Prime Co-branded Master Card Gold Card
Card Type: Local Master Card Gold Card
Card Limit: Staff Card: BDT 15,000/- to 1, 00,000/Master Card Gold Normal: BDT 50,000/- to 1, 00,000/Master Card VIP: BDT 1, 00,000/- to 2, 00,000/Eligibility:

Primary Eligibility: Minimum BDT 25,000/- gross income from regular sources.
Bangladeshi Citizen 21-65 years of age and has account with HSBC

For Supplementary card the person has to be at least 18 years of age

Card Life: By default 2 years for all cards new and renewed

Billing Cycle: 7th day of the month

Repayment Period: 26th day of every month. Maximum 50 days interest free period

Minimum Payment Calculation

8% of the current balance shown on the statement or BDT 500/- which ever is higher.
If current balance is less than BDT 500/-, then full payment

For over limit account: 8% of the credit limit plus exceeded amount

Corporate Banking Services

HSBC offers wide range of cash financing, working capital, short, and medium-term loans, and
guarantee facilities to its corporate customers. Its offshore banking Unit (OBU) provides US
dollar denominated working capital as well as short tem finance for capital imports to eligible
businesses. HSBC is a worldwide leader in banking and financial services whose success is
based on its relationships with its clients. Whether locally or around the world, HSBC offers a
comprehensive range of services that can be tailored to the companys needs. Some major
services provided by HSBC corporate division are Custody services, Global payment & cash
management, Trade services, & Hexagon.
Global Payments & Cash Management (PCM)
HSBCs Global Payments and Cash Management services are designed to help its clients to
operate efficiently, profitably and with comprehensive support. The aim is to provide a service
that takes full account of the customers local needs as well as regional and international
requirements using our expertise and global resources of the HSBC Group. PCM provides the
following services to its clients:

Accounts & transaction management services: Structuring of bank accounts to

optimize the management and flow of funds within or across national borders.

Cash & Liquidity management services: Cash is a companys most volatile asset and
HSBC provides the best service to manage its clients cash efficiently.

HSBC Trade Services (HTV)

HSBC is the leading provider of trade finance and related services to importers and exporters in
Asia. The bank operates a highly automated trade-processing network and offers an electronic
data interchange (EDI) capability through Hexagon. Some services provided by HTV are as
follows:

Import Services
A full range of import services handled by experienced staff is available, ensuring that clients
import documents are processed without delay. Some import related services are- Import
collection services, Import financing services, Import documentary advising, Processing, and
advising on shipping guarantees.
Export Services
HSBC provides advices on any aspect of export document preparation. It also provides working
capital finance to help the sourcing of raw materials. Some other export services are- Preshipment Financing, Post shipment Financing, Purchase of Export bills, Back-to-Back credit, and
LC, Documentary credit advising, Documentary checking.
Risk management
HSBC has developed a unique range of specialized products aimed specifically to reduce a
companys exposure to international trade risk. The services in this area areTrade Collect Service:
A dedicated US dollar export bill collection service from HSBC.
Trade Safe Service:
A major concern for many exporters is the reliability of the LC issuing bank, particularly if
shipments are going to less familiar markets. If these banks get into difficulties, the exporter may
not get paid. Thats where HSBC comes in. Under the Trade Safe Service, HSBC absorb the
bank and country risk, allowing clients to concentrate on growing business.
So these are some of the services provided by HSBC trade services.

Hexagon
Hexagon is the HSBC Groups global electronic banking service, specifically designed for the
corporate market. It gives a customer access to one of the largest banking and financial services
organizations in the world 24 hours a day, seven days a week.
Hexagon is one of the most advanced and easy-to-use electronic banking packages on the market
today. It has been designed to make life easier for the customers; with Hexagon businesses can
become more efficient, increase accuracy, and reduce costs.
Hexagon offers an extensive and growing range of financial services, including global cash
management, trade services, foreign exchange, and securities, all from a single PC.
Hexagon uses the HSBC Groups Global Data Network, the largest private system of its kind in
the world. Additionally, it has a comprehensive range of system security, and control features
together with its use of full data encryption, means the data is totally secure.
Services Provided by Hexagon:
Account information:
Hexagon provides access to all the customers accounts. In addition to the latest available
balances, Hexagon offers full statement information that can be tailored to customer
requirements.
Report Writer
The account information can be quickly and easily printed using the flexible Report Writer
Service or the information can be exported to some other formats.
Export
Export allows account details to be exported in variety formats. This enables Hexagon to act as a
true financial link between the banks computer systems and the customer own back-office
accounting packages.

Payments:
Transfers between accounts and payments to third parties are easily achieved in more than 60
currencies anywhere in the world. Both priority payments and low-value automated clearinghouse payment options are available in Hexagon.

Exports Documentation:
Hexagon gives the customers the ability to view outstanding documentary credits and bills in
summary or a more detailed format, including interest details where financing has been
requested. Coupled with account information, companies are able to track the whole export
process from the point when the documentary credit is opened or bill is presented through when
settlement is made.
Import Documentation:
With the import option, a customer can easily create and amend documentary credit (DC)
applications and submit them online.
So these were some of the very important services provided by HSBCs unique banking
software HEXAGON.
Other Facilities Provided to Corporate Customers:
HSBC also offers some other facilities to its customers. They are Factoring, Forfeiting,
Guarantees, Hire Purchase Finance, Leasing, Tender Bond, and Performance Bonds. All these
services and products are designed to meet the total business needs of the corporate clients of
HSBC.

HSBC International network:

The HSBC Groups international network comprises of some 10,500 offices in 81 countries. A
brief list is presented bellow:
Europe
Armenia

Greece

70

Netherlands

Azerbaijan

Hungary

Poland

Belgium

Ireland

14

Russia

Channel Islands

34

Isle of Man

Spain

Cyprus

144

Italy

Sweden

Czech Republic

Luxembourg

Switzerland

15

France

836

Malta

64

Turkey

160

Germany

11

Monaco

United Kingdom

1908

Australia

39

Indonesia

13

New Zealand

Bangladesh

Japan

Pakistan

Brunei

13

Kazakhstan

Philippines

24

China

30

Korea Republic

12

Singapore

26

Cook Islands

Macau

Special 5

Sri Lanka

10

Asia-Pacific

Darussalam

Admin.Region
Hong Kong

381

Malaysia

42

Taiwan

19

India

41

Maldives

Thailand

Vietnam

Canada

282

United

Americas
Argentina

196

States

of 3566

America
Bahamas

Cayman Islands

Uruguay

Bermuda

Chile

Venezuela

Brazil

1470

Mexico

1387

British
Islands

Panama
Middle East &

16

Virgin 3

Africa
Algeria

Israel

Palestinian

Autonomous Area
Angola

Jordan

Qatar

Bahrain

Lebanon

Saudi Arabia

75

Cote d Ivoire

Libya

South Africa

10

Egypt

16

Mauritius

14

Uganda

Ghana

Morocco

United

Arab 16

Emirates
Iran

Oman

To ensure that the key resources (management time, capital, human resources and information
technology) are correctly allocated and that the exchange of best practice is accelerated between
entities, the group has classified the countries where it operates into 3 categories: the large, the
major and the international.
These classifications are a function of sustainable, attributable earnings, the number of retail
clients, balance sheet and size of operation. A brief presentation of this classification is shown
below:
Large: United Kingdom, USA and Hong Kong SAR/Mainland China.

Definition

More than one million personal clients

Sustainable earnings greater than US$ 200 million

Business Focus

Concentrated group resources on wealth management

Be a top 10 player in any market or region served
Develop cross selling, loyalty programs and value added products.
Major: Argentina, Canada, Malaysia, India, Kingdom of Saudi Arabia, Singapore and
United Arab Emirates.

Definition

Sustainable earnings between US$ 100 200 million

Business Focus

 Universal banks (personal, corporate, and investment banking with domestic business)
Platforms for international group business
Next generation of large companies
Stable self funding entities
Onshore HQ
International: The rest of the world.

Definition

Earnings below US$ 100 million

Business Focus

Platforms for international group business

Limited domestic presence
Nursery for developing management
Tomorrows major businesses
Supported by offshore HQ

Scope of Operation
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 2014, according to Relsbank, HSBC was the fourth-largest bank in the world by assets
(with $2,670.00 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
Fortier. 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.[85] This reputation has been brought into question in the 21st
century.
In its technical management, however, HSBC has recently suffered a series of headline-making
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 has been audited by PwC, one of the Big Four auditors since 2015.
HSBC entered Brunei in 1947. However, on April 2016, HSBC commenced winding down its
operations in the country citing HSBC Groups global review to optimize its global network and
reduce complexity as outlined during the HSBC Investor Update on 9 June 2015.
Principal Subsidiaries of HSBC bankAsia Pacific
To name a few are

HSBC Bank Australia Limited.

HSBC Bangladesh Ltd.

HSBC Bank India

HSBC Bank (China) Company Ltd

Europe

HSBC Mongolia

HSBC France

HSBC Trinkaus und Burkhardt AG

Americas

HSBC Bank USA Inc

HSBC Finance Corporation

HSBC Bank Canada

HSBC Bank Bermuda

HSBC Mexico

Middle East and North Africa

HSBC Bank Middle East Ltd

HSBC Bank Egypt SAE

The Saudi British Bank

Principal business groups and divisions

HSBC organizes its customer-facing activities within four business groups: Commercial
banking; Global banking and Markets (investment banking); Retail Banking and Wealth
Management (RBWM); and Global Private Banking.
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 itself as "emerging markets-led and financing-focused. It is currently being led by
former fixed-income trader Samir Assaf, who was promoted from global head of markets on 10
December 2010.
Global Private Banking
HSBC Private Bank is the marketing name for the private banking business conducted by the
principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank,
together with the private banking activities of HSBC Trinkaus, known collectively as Group
Private Banking, provides services to high-net-worth individuals and their families through 93
locations in some 42 countries and territories in Europe, the Asia-Pacific region, the Americas,
the Middle East and Africa. According to the Scorpio Partnership Global Private Banking
Benchmark 2014, the bank had 382 USD Bn of assets under management (AuM) a decrease of
4% on the 2013 figure.

In September 2008, HSBC announced that it would combine its two Swiss private banks under
one brand name in 2009, with HSBC Guyerzeller and HSBC Private Bank to be merged into
one legal entity, under the newly appointed CEO of HSBC Private Bank, Alexandre Zeller.[94]
Retail banking and wealth management
HSBC provides more than 54 million customers worldwide with a full range of personal
financial services, including current and savings accounts, mortgage loans, car financing,
insurance, credit cards, loans, pensions and investments.
Retail Banking and Wealth Management (also known as RBWM) was previously referred to as
Personal Financial Services (PFS). This rename was announced during HSBC's 2011 Investor
Day.
Group service centers
As a cost-saving measure HSBC is off shoring processing work to lower cost economies in order
to reduce the cost of providing services in developed countries. These locations take on work
such

as data

processing and customer

service,

but

also

internal software

engineering at Pune (India), Gurgaon (India), Bangalore (India), Chennai (India),Hyderabad (Ind
ia), Vishakhapatnam (India), Kolkata (India), Guangzhou (China), Curitiba (Brazil)

and Kuala

Lumpur (Malaysia).
Currently, HSBC operates centers out of nine countries, including; United Kingdom (Leeds,
Hamilton, Edinburgh, Swansea, Manchester, Coventry & Leicester), Brazil (Curitiba), the Czech
Republic

(Ostrava),

India

(Kolkata, Chennai, Hyderabad, Bangalore, Visakhapatnam,Bombay, Gurgaon and Pune), China

(Shanghai, Guangzhou and Shenzhen), Malaysia (Kuala Lumpur), Poland (Krakw), Sri Lanka
(Rajagiriya) and the Philippines (Manila).
Competitive environment of HSBC
With respect to the current competitive environment scene and in the banking industry in which
HSBC belongs, regulatory and technological changes are the main catalysts, making entrenched
competitive structures obsolete and mandating the development of new products, new processes,
new strategies, and new public policies toward the industry under analysis (Bond Green, 2003).
Financial centers, in vigorous competition with each other, have undergone further regulatory

change in their efforts to capture a greater share of international trade in financial services, even
as common efforts at the regional and global level have tried to support safety and soundness and
a reasonably level competitive playing field. Banks and securities firms have had to devise and
implement new strategies--sometimes leading events or (perhaps more often) responding to
them--and the financial services industry has seen a wave of mergers, acquisitions, and strategic
alliances in virtually all parts of the world. There are numerous major banking players in the
industry, included in the list is HSBC, who strive for market leadership in all their business
aspects. As such, the level of industry competition is very stiff and very aggressive.
The major competitors Of HSBC bank are BARCLAYS, LLOYDS banking group, ROYAL
BANK OF SCOTLAND (RBS).
Few organizations can excel simultaneously all over the scene, as a result they are renowned for
their ability to organize and deal with new issues promptly, and HSBC is one of them.
In the case of HSBC, even though this organization had a very strong market competition in the
industry where entrants have little or no threat will earn low returns on their profits if it has to
face a superior quality and lower-cost alternative. For competitive advantage, HSBC uses strong
branding and a tailored approach to give customers an individual service, whether they want
investment banking services for their company, or a personal mortgage. With high personal
contact or a range of electronic access points, they can provide their customers with accessibility
to their services anywhere in the world. Each product produced is tailored to the customer's
needs but follows very precise processes. At each stage, the customer and advisor must sign
documentation to prove that the right level of advice has been given, is understood and the
customer feels that at that critical point, they have received good quality service.
It is evident that the Hong Kong and Shanghai Banking Corporation or HSBC invest on software
programs and applications, in response to the fast-paced technological changes today. With the
use of the Internet and other web-based applications, it is easier for the company to reach their
customers globally and serve them better and faster. With the pleasant response of consumers to
the efficient use of the World Wide Web, HSBC will not have a hard time relating to their
customers globally, and even implementing projects and new programs to serve and relate to
their customers effectively.
The motto of investing heavily on software programs and applications is to keep pace with the
technological change as well as to have competitive edge compared to its rivals.

Global Products and Their Function

HSBC bank has four product lines to offer globally and they areHSBC Direct
HSBC Direct is a telephone/online direct banking operation which attracts customers through
mortgages, accounts and savings. It was first launched in the USA in November 2005 and is
based on HSBC's 'First Direct' subsidiary in Britain which was launched in the 1980s. The
service is now also available in Canada, Taiwan, South Korea, France and India. Poland is
launching business direct in September 2009. In the US, HSBC Direct is now part of HSBC
Advance.
HSBCnet
HSBCnet is a global service that caters to local business needs by offering specialized
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.
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.
HSBC net 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. 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 centers, free banking services and preferential rates. A HSBC Premier customer receives the
HSBC Premier services in all countries that offer HSBC Premier, without having to meet that
country's qualifying criteria ("Premier in One, Premier in All").
Involvement of HSBC Bank in FOREX market
HSBC has incorporated itself to the Foreign Exchange Market (FOREX) from the very
beginning of its operation. HSBC is recognized as a market leader in FX derivatives globally
.HSBCs training and structuring team leverages their strength as one of the strongest universal
banks to act as a major market maker and liquidity provider.
HSBC Bank is able to provide following facilities to the importers and exporters by adding
themselves in the FOREX marketAverage rate option
An average rate option (ARO) is a useful tool for companies that need to make or receive regular
payments in foreign currency. It provides protection against adverse movements in foreign
exchange rates while also allowing the company to benefit from any movements in their favour.
A premium is payable for an ARO.
Currency options
A currency option provides you with the right to certain protection at a specified foreign
exchange rate on a specific forward date. You are, however, under no obligation to deal at your
protected rate, and you may walk away from the deal at maturity and transact in the spot market
if the rate has moved in your favor. A currency option, therefore, combines the certain protection
provided by a forward foreign exchange contract with the flexibility of a spot deal. A premium is
payable for a plain (vanilla) currency option. Currency options are available in nearly any
currency pair where there is a forward market.
Forward extra
This structure entitles you to buy foreign currency at a specified protected 'worst-case' rate of
exchange or at a more favorable rate, as far as a predetermined 'best possible' limit rate. If the
limit rate is hit or exceeded at any time during the life of the trade, you are obliged to deal at the
protected worst-case rate. There is no premium payable for a forward extra (FE).
Forward extra plus

This structure entitles you to buy foreign currency at a specified protected 'worst-case' rate of
exchange or at a more favorable rate, up to a predetermined 'best possible' limit rate. If the limit
rate is hit or exceeded at any time during the life of the trade, you are obliged to deal at the
original forward rate. There is no premium payable for a forward extra plus.
Participating forward
This structure provides a guaranteed protected rate for your full exposure while allowing you to
benefit from a favorable exchange rate move on a predetermined portion of your currency
exposure. There is no premium payable for a participating forward.
Tracker forward
This structure provides a hedge rate at zero premium cost with the ability to benefit from a
potentially unlimited favorable exchange rate move. There is no premium payable for a tracker
forward.
To take out a tracker forward, you need to advise us of the amount, the currencies involved, the
expiry date and the worst rate which you would like to buy your foreign currency.
Lending Procedure of HSBC
HSBC bank is willing to provide its customers with numerous types of borrowing options. It
basically provides loans on the grounds of Home loan, Small Business loan, loan for vacation,
Home loan etc.
In case of Home loan and loan for vacation , HSBC does not require to have mortgage or cash
security as their slogan proclaim that it has believe on its customers.
What HSBC often requires a client is to go through

Simple documentation procedures- To have clarity in their way of doing business.

HSBC also requires it client should be of 23 years old (at least) and also employed by a
well-established company with a minimum income of BDT. 15000 9 in case of BD), selfemployed person can also apply for loan subject to proof of income.

In case of granting loan on the ground of small businessSmall business loans available between 1000 and 25000.once agreed funds can be transferred
same day.

Lending is subject to status.

Also subject to documentary evidence.

HSBC does not require its borrowers to have a current account maintaining in that bank.

Repayment terms of 12 months to 10 years.

Remittance facilities
The word Remittance come from Remit which means to a payment of money send to a person
located in another place.
This task of sending money or payment to a person located in another place can also be done
through HSBC bank, Wire Transfers, also referred to as "Funds Transfers", are a quick and
convenient way to send funds from your eligible HSBC deposit accounts to another person,
business or financial institution internationally through Personal Internet Banking.
HSBC Personal Internet Banking customers can initiate a wire transfer request by following the
steps below:

Log on to Personal Internet Banking

Select "Wire Transfers" from the menu.

Select "Continue to Wire Transfer"

Complete the online wire transfer request form

Trade Financing Facilities of HSBCHSBC offers trade financing facilities for both export and imports to facilitate or pave the way
for international business.
For importers and exporters, HSBC has tailored trade finance that can help them to improve their
cash flow, negotiate better terms with suppliers and pay them promptly. The import financing of
HSBC bridges the gap between making payment to suppliers and receiving payment from
buyers. These financing procedures can be done in any major currencies. HSBC provide import
financing to the importers based on their trade cycle.
Key benefits of trade financing to the importers and exporters

They can maximize their working capital

Payment to the suppliers will be quicker than before.

Profitability Measurement process of HSBC bank

To measure the profitability or performance of an entity, every entity has a closer look on the
following aspects, which can be thought of as performance indicators.

Return on Assets.

Return on Equity.

Profit Margin

Cost to Income Ratio

Price to Book Value.

HSBC Bank is not distinct from other bank they follow almost same performance indicators as
do others to evaluate their performance or measuring their profitability. A diagram will be more
convenient to represent these indicators-

Return
on
Equity
(ROE)
Return
on
Capital

Return
on
Assest
Performan
ce

Profit
Margin

Cash
Flow
Earnin
g Par
Share

Return on EquityReturn on equity (ROE) is the amount of net income returned as a percentage
of shareholders equity. Return on equity measures a corporation's profitability by revealing how
much
HSBC

profit

Holdings

company
PLC's

generates

with

annualized net

the

money

income for

shareholders

the quarter that

have

invested.

ended

in June,

2016 was $10,444 Mil.HSBC Holdings PLCs average shareholder equity for the quarter that
equity (ROE) for the quarter that ended in June. 2016 was 5.46%.

HSBCs Return on Equity Range over the Past 10

Years
Min:

5.06

Max:

17.77

Current: 5.73

HSBC's Return on Equity is ranked lower than

69% of
in

the Global

Banks

the 1656 Companies

Return on Capital-

Return

Global industry.

on

invested

capital

measures how well a company

generates cash flow relative to the capital it has invested in its business. It is also called Return
on Capital (ROC). HSBC Holdings PLC's annualized return on invested capital (ROIC) for
the quarter that ended in June. 2016 was11.76%.
As of today, HSBC Holdings PLC's weighted average cost Of capital is 9.53%. HSBC Holdings
PLC's return on invested capital is 11.92% (calculated using TTM income statement data).
HSBC Holdings PLC generates higher returns on investment than it costs the company to raise
the capital needed for that investment. It is earning excess returns. A firm that expects to continue
generating positive excess returns on new investments in the future will see its value increase as
growth increases.
Return on AssetsReturn on assets is calculated as net income divided by its average. HSBC Holdings
PLC's annualized net income for the quarter that ended in June. 2016 was$10, 444 Mil. HSBC
Holdings PLC's average total assets for the quarter that ended in June. 2016 was $2,601,908
Mil.Therefore, HSBC Holdings PLC's annualized return on assets (ROA) for the quarter that
ended in June, 2016 was0.40%

HSBC' s Return on Assets Range Over the

Past
Min:

10
0.23

Years
Max:

1.13

Current: 0.43

HSBC's Return on Assets is ranked lower

than
75% of

the 1666 Companies

in the Global Banks - Global industry.

Earnings per ShareEarnings per share (EPS) are the portion of a company's profit allocated to each outstanding
share of common stock. Earnings per share serves as an indicator of a company's profitability.
Calculated as:

HSBC Holdings PLC's diluted earnings per share (Diluted EPS) for the three months ended
in June 2016 was $0.60. Its diluted earnings per share (Diluted EPS) for the trailing twelve
months (TTM) ended in June. 2016 was $2.50
HSBC Holdings PLC's basic earnings per share (Basic EPS) for the three months ended in June.
2016 was $0.60.Its basic earnings per share (Basic EPS) for the trailing twelve months
(TTM) ended in June. 2016 was $2.50.
Conclusion
After completing this report we are pretty much sure about the motto of assigning us this task.
We were assigned to do this task so that we could get ourselves acquainted with the role and
activities performed by an international bank.

With the accomplishment of this report, we have a clear knowledge about the scope of an
international bank as well as their global products and their functions. We have also
demonstrated about what kind of competitive environment may prevail in business and how a
successful business may face it.
This report also demonstrates the various roles played by an international bank for facilitating the
task of exporters and importers also other players in the international business. We have also got
the idea of measuring profitability or performance of a bank.
In conclusion, we can say that, we have learned a lot by doing this report which could be very
helpful for us in understanding the functioning of an international bank.
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"Strategic Analysis Of HSBC Bank In Bangladesh - Assignment Point". Assignment

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"Strategic Analysis Of HSBC Bank In Bangladesh - Assignment Point". Assignment

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Ma, Hong. "Spider oak, Whisper Systems, Silent Circle". Technical Services Quarterly
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"HSBC". En.wikipedia.org. N.p., 2016. Web. 18 Oct. 2016.

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Oct. 2016.

"HSBC Holdings PLC (HSBC) Return On Equity". Gurufocus.com. N.p., 2016. Web. 18
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