History of HSBC – strengths, positions in Asia.
HSBC banking group was established in 1865 in Hong Kong to help finance trade
between Asia and Europe. Thomas Sutherland formed the bank from the Hong Kong and
Shanghai Banking Corporation Limited. The ultimate purpose was to establish a local bank
based on Scottish banking values and principles. In the early years, the bank expanded its
operations in Asia. Branches and Networks opened in Japan in 1866, and a branch in Calcutta,
India 1867. It later expanded into Manila in 1875, Singapore in 1877, and Thailand in 1888. In
the 20th Century, HSBC faced various challenges in its Asian operations. The bank's assets had
tripled to a value of HK$3.6 billion from 1940 to 1954. The ascension to power of the
Communist Regime in China resulted in the bank's operations' shutdown in 1949 amid the civil
war. World War II had also interrupted the bank's business with its headquarters relocated to
London. However, HSBC returned to Hong Kong after the war ended to finance the massive
reconstruction efforts across Asia. The 1950s and 1960s saw an aggressive campaign by the bank
opening branches across Asia and the Middle East. The 1970s and 1980s expansion led to
acquisitions of other banks in Hong Kong and expanding into other regions of the world. The
bank expanded into Europe, North and South America, Europe, Australia, and New Zealand. In
1980, HSBC opened in Beijing and made inroads into China. The 21st Century has seen HSBC
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bank grow and is currently the largest foreign-owned bank operating in China. The bank's loan
syndicate and equities had made HSBC the largest financial and banking services organization in
the world by 2007.
HSBC presence in Asia 2007 – 2020.
In the 21st Century, HSBC operations have expanded in China and Asia to retain the
status it gained in 2007. The bank acquired the Bank of Taiwan in December 2007 (Treanor) .
HSBC acquired Infrastructure Leasing & Financial Services Limited (IL&FS), Indian
investments firm, in May of 2008 (The Hindu) . HSBC Corporation formally established HSBC
Bank (Taiwan) Limited in 2009, and operations commenced in May 2010. The new headquarters
of the bank opened in the Pudong district of Shanghai in 2010. The bank's 100th office opened in
China in the same year of 2010 (Hannah 1484) . In the year of 2017, HSBC Qianhai Securities
Ltd. began operations in China. The years 2007 through to 2020 have seen HSBC consolidate its
business in Asia to cement its position as a leading financial services organization.
Post Brexit, is China the best market for HSBC?
Hong Kong and China are the biggest markets for HSBC. The Brexit situation in the UK,
where the bank is headquartered, has brought many uncertainties. The UK's political exit from
the EU has resulted in new political and business regulations that create a challenging business
environment. HSBC estimated that 80% of reported profits in 2019 were linked to the Hong
Kong and China's market (Colombo 42) . However, China is currently facing some economic
challenges. A strain of relations between the US and China has created an uncertain financial
future. US-China trade wars that began in 2018 have created a global economic depression.
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Furthermore, the conflict between Hong Kong and mainland China has brought uncertain
economic effects. These challenges have created a dilemma for HSBC, which has major
operations in UK, Beijing, Hong Kong, and the US. As it stands, China is still the best market for
HSBC amid a global health crisis. The COVID-19 pandemic that is currently devastating the
globe emerged from China and created an economic crisis. However, China's market is still the
biggest, and it has proved over the years to stand the test of time.
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Works Cited
Colombo, N. "HSBC Holdings and Others v Commission: Fining Methods Under the Spotlight (T-
105/17 HSBC Holdings)." European Competition and Regulatory Law Review (2020): 40-44.
Hannah, Leslie. "Richard Roberts and David Kynaston, The lion wakes: a modern history of HSBC." The
Economic History Review (2015): 1483-1485.
The Hindu. 18 May 2008. 9 February 2021.
Treanor, Jill. Taiwan gives HSBC £750m to take on Chinese bank. 15 December