HSBC SWOT & PESTLE Analysis
COMPANY PROFILE -HSBC
Business Sector :Banking and Financial Services
Operating Geography :United Kingdom, Europe, Global
About HSBC :
Driven by four major business segments, namely, Commercial Banking, Global Banking and Markets, Global Private Banking and Retail Banking and Wealth Management; HSBC is one of the world's largest banks. It is headquartered in London, United Kingdom. The bank was originally founded in 1865 with branches being opened in Hong Kong and Shanghai. It was only in 1991 that the Hong Kong and Shanghai Banking Corporation formed the bank in its current form in London as a new holdings company. The name of the bank still represents in initials the name of the Hong Kong and Shanghai Banking Corporation. The bank’s acquisition of Midland Bank in 1992 was a watershed moment in its history as it gave the bank significant presence in the UK. Also, with the passing on of the sovereignty of Hong Kong to China being imminent, this acquisition allowed the bank to shift headquarters to London in 1993. It has an international coverage with significant footprints in the markets of Europe, Asia, Middle East and North Africa, North America and Latin America. All these include 3900 offices across 67 countries and territories. In 2022, the bank has released an API developer portal for firms to test and integrate the bank’s collection of application programming interfaces.
The USP of HSBC is that it is the largest bank in Europe. The mission statement of HSBC reads, “achieve growth by being socially focused, customer centered and commercially driven.” Its vision is “to be the bank of choice for organizations and businesses that aim to create community, social and environmental benefits.”
HSBC Revenue :
$ 50.43 billion - FY ending 31st December 2020
$ 56.1 billion - FY ending 31st December 2019
Competitive Analysis of HSBC
1. Geographic and business line diversification 2. Strong capitalization levels 3. Good dividend record 4. Consistently sound financials over the years | 1. Lack of good customer experience |
1. Opening of China's domestic capital markets 2. Growth prospects in Asia 3. Benefits from transition in senior leadership | 1. Increasing financial crimes 2. Heightened levels of risk in the Asia-Pacific region |
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Detailed SWOT Analysis of HSBC
Strength
1. Geographic and business line diversification: In the words of Stuart Gulliver, HSBC is a bank that is bestowed with a diversified yet universal banking business model. The business model comprises of one Corporate Centre and four global businesses, namely; Retail Banking and Wealth Management (RBWM), Commercial Banking (CMB), Global Banking & Markets (GB&M) and Global Private Banking (GPB). This business diversification into specialized fields coupled with the exceptional talent pool that business possesses has made HSBC one of the world's largest banks. This sort of an operating model combined with capital strength and international network, provides HSBC a hedge even amidst political and economic instabilities. This was evident at the time of Brexit when customer activity across different business segments remained resilient. It was therefore credited with various prestigious titles including Asia’s Best Bank for Financing, Hong Kong’s Best Bank, Best Investment Bank in Middle East, Kuwait and Oman, etc. at the Euromoney Awards of Excellence 2020.
2. Strong capitalisation levels: HSBC enjoys a strong capital position supported by the fact that its CET1 (Capital Equity Tier 1 Ratio) is 14.7% as of early 2020, with an aim of maintaining the ration between 14%-15% by the end of 2021. Also, in accordance to the strategic measures being followed by the company it will lower its Risk Weighted Assets (RWA). Since the start of 2015 until now, RWAs worth $296 billion have been extracted. The size of balance sheet has increased, stimulated by an increase in customer accounts. Total reported assets were 6.1% higher in 2019 than in 2018. It is because of this strong capitalization that HSBC has been able to affect share buybacks and provide a sustainable dividend.The remaining section under "Strength" is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
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Check Out Analysis of Other Relevant Companies
References used in HSBC SWOT & PESTLE Analysis Report
1. HSBC mission and vision - https://www.slideshare.net/openinnovation/visions-missions-of-fortune-global-100/25-HSBC_HoldingsVisionWe_aspire_to_be
2. HSBC company profile - https://in.reuters.com/finance/stocks/company-profile/HSBA.L
3. HSBC history - https://www.hsbc.com/who-we-are/our-history
4. How technology is transforming corporate banking - https://www.hsbc.com/news-and-insight/2019/how-technology-is-transforming-corporate-banking
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HSBC SWOT & PESTLE Analysis - SWOT & PESTLE.COM
SWOT & PESTLE.com (2023). HSBC SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/hsbc/ [Accessed 27 Mar, 2023].
In-text: (SWOT & PESTLE.com, 2023)
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HSBC SWOT and PESTLE analysis has been conducted by and reviewed by senior analysts from Barakaat Consulting.
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