HSBC HOLDINGS.   Term Paper ID:29711 Click to get this paper

Essay Subject: Describes the Asian banking facility headquartered in the United Kingdom.... More...

14 Pages / 3150 Words 12 sources, 23 Citations, APA Format $56.00 Return to List of Papers

Paper Abstract: Describes the Asian banking facility headquartered in the United Kingdom. Large worldwide holdings of HSBC. Success of its electronic banking services. Acquisitions. Performance measurement. Actions of HSBC. Baseline analysis, baseline business, WBS & critical path analyses. Importance of project scheduling. Effect of China's opening to foreign business. Paper Introduction: Introduction Hongkong and Shanghai Banking Corporation Ltd. is the namesake bank within HSBC Holdings, headquartered in the United Kingdom. Along with owning the Hongkong and Shanghai Banking Corporation Ltd., HSBC also owns France's CCF, and 62% of Hong Kong's Hang Seng Bank. HSBC has more than 7,000 offices in about 80 countries, providing consumer and business banking services, asset management, investment banking, securities trading, insurance, and leasing. US operations include HSBC USA and joint venture Wells Fargo HSBC Trade Bank, Republic Bank of New York, and consumer lender Household International. HSBC does business in 64 languages, conducts member transactions in some 40 currencies and tends toward allowing autonomous management of its banks, and financial services subsidiaries (About HSBC O Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. (2 2. The ultimate performancemeasurement is the accounting systems of the branches, which brings us tothe overall achievements of the HSBC. Conclusion HSBC has often been called a "bottom feeder" since it typicallyspecializes in growing by buying up troubled banks and financialestablishments, adding their name to the operation, and offering a standardbasket of financial services (Haroldson, 1999). |569,139. | 1,853.6 | 1,691.6 |(HSFC Annual Report) Financial ratios|Ratios |HSBC | Industry1 | Market2 ||Current Ratio |-- |-- | 1.4 ||Quick Ratio | -- | -- | 1. | 5,4 8. % ||12-Month Dividend Growth |(1 .4%) | 36.1% | 34.4% ||36-Month Revenue Growth | 2.7% | 2 .8% | 9.1% ||36-Month Net Income Growth | 2.5% | 12.8% | (19.8%) ||36-Month EPS Growth |(45.7%) | (1 .6%) | (28.8%) ||36-Month Dividend Growth | -- | 26.4% | (7. Although classically consideredfor product development, it can be for a project, business or technicalmanagement control (Wysocki, 2 ). Agence France Presse English HSBC eyes larger slice of Asia forex pie via net. (2 2,June 6). John Bond's HSBC. Also ignored was the fact that basicaccounting safeguards were apparently not in place in the Singapore office. US operations include HSBC USA and joint ventureWells Fargo HSBC Trade Bank, Republic Bank of New York, and consumer lenderHousehold International. | 628,244. The company thenbegan expanding in Asia again, particularly in Malaysia, where its HongkongBank Malaysia became the country's first locally incorporated foreign bank(Safarian, 2 2). ||Total Current Liabilities | -- | -- | -- ||Long-Term Debt | 27,956. Most of the income hasbeen generated by the foreign exchange market, and since HSBC waspositioned in China, the assumption of currency credibility was greatlyenhanced. is the namesake bankwithin HSBC Holdings, headquartered in the United Kingdom. Also in 1999, the company made a decision to start sellingstock in the United States, a move which had a net management effect ofadapting reporting systems into the accounting standards established by theSEC (Safarian, 2 2). ||Shares Outstanding (mil.) | 1,871. Through an international networklinked by advanced technology, including a rapidly growing e-commercecapability, HSBC provides a comprehensive range of financial services:personal financial services; commercial banking; corporate, investmentbanking and markets; private banking; and other activities. Since they areentirely "futures-based" the derivative shares a double risk; that of thefuture growth (or diminution) of the assets and that of the derivativeasset based on those assets. The remainder of this paper will consider some of the more overtactions of HSBC as verified by documents on the Internet and in the form ofmagazine articles and books. On universal currency hedges.Journal of Financial and Quantitative Analysis, 112 Capell, K.; Clifford, M. (2 , Jan.). According to the Bank for International Settlements'October 1992 report, Recent Developments in International InterbankRelations, swaps are the largest type of derivatives, as measured by thenotional principal amount outstanding" (McClintock, 1996, 15). In practice, derivatives are agreements, still usuallybetween two or more companies rather than individuals that are based onequities (stocks), debt (bonds, bills, and notes), currencies, accountsreceivable, potential interest payments, and even indexes such as theStandard & Poors, or the Dow Jones Industrial Average (Ayling, 1986).McClintock (1996) explains how derivatives can be sold and traded onregulated exchanges, such as the Chicago Board of Trade, although most ofthem are created directly between counter parties, referred to in theliterature, typically, as "Over The Counter." He points out that theprimary purpose of derivatives is to reduce the risk inherent influctuations of foreign exchange rates, interest rates, and market prices.Derivatives traded on exchanges also are said to serve as a "pricediscovery mechanism. We needstronger walls" (Sweeney, 2 , 22). In 1993 thecompany formed London-based HSBC Holdings and divested assets, most notablyits interest in Hong Kong-based Cathay Pacific Airways. New York: JohnWiley & Sons | 6,628. 2 ). Banker compares the continuing battlebetween financial institutions and the humans who work for them, and thehumans who desire to work against them to an argument by Jules Verne.""Jules Verne says that there is a perennial contest between those whobuild the fortifications and those who build the cannon. Acquisitions included MarineMidland Bank (US, 198 ), Hongkong Bank of Canada (1981), 51% of treasurysecurities dealer Carroll McEntee & McGinley (US, 1983), most of the assetsand liabilities of the Bank of British Columbia (1986), and Lloyds BankCanada (199 ). % | 65. HSBC Baseline Analysis The classical definition of baseline analysis is that it is aplanning and control instrument that usually takes the form of a summary ofattributes that includes, at a minimum, quantity, quality, timing, costs.The baseline analysis (BA) is a management tool that allows management tohave a formal reference for comparison and verification of subsequentefforts, progress, analysis and control. Nov.14). (2 1, June 2 ).Reuters. Total charges pertaining to Argentina equaled morethan $1 billion that year. Working out of the bank's Singapore office, Mr. Leeson wasaccused of losing 1.3 billon dollars as a result of a risky derivativesinvestment with the potential of a $27 billon gain. In normal accounting processes, a derivativecan be used to maximize risk sharing, letting the company efficientlyallocates capital for productive and safe investment opportunities (Merton,1995, 32). | 13,166. | 33,798. HSBC does business in 64 languages, conducts member transactions insome 4 currencies and tends toward allowing autonomous management of itsbanks, and financial services subsidiaries (About HSBC Online). Philosophically, and sometimes in practice, a financial derivative isreally nothing more than a financial instrument that is valuedproportionally to the value of either real assets or an index of assets(McClintock, 1996). This involved formally approved versions of a configuration item,regardless of the media, formally designated and fixed at a specific timeduring the configuration's life cycle. HSBC returned to China with offices in Beijing andGuangzhou. Still others use elaborate codingand encryption procedures that are kept secret on a "need to know" basis.In fact, computers probably are posing the greatest risk to financialinstitutions, since computers make it so easy to create financialtransactions. Since this derivative, and any new or existing derivative, wouldbe traded on any exchange the board and the key executives determined thatthe derivative development would have to meet stringent requirements ofthree major stock exchanges, four separate national accounting standardssystems, and five separate traditions for declaring profits. The move will position HSBC to conduct NAFTA-related business with greater ease (About HSBC Online). The verification results are presented as evidence ofspecification compliance (Wysocki, 2 ). (2 ). |25,196. HSBC gains big foothold in US with Household takeover. Capell (1999)observes that John Bond, the CEO, articulated a group strategy for the first time to senior managers at the group's rustic training center, Bricket Woods, outside London. Business Asia. ||Total Liabilities | 649,898. (2 , Nov.).New Weapons. Although HSBC is smaller in size both banks want to earn big profits by finding the perfect combination of consumer banking, asset management, investment banking, insurance, and corporate banking. US Banker. ||Total Equity | 45,979. | 32,298. Xinhua News Agency. Leeson, it will be recalled, was an investment officer of Barings BankLondon England. After the financial shock, the economicshock. | 673,814. The reason a baseline analysis is so important for HSBC is the companyhas an unusually diverse geographical reach. 23). | 21,3 . assets. The company is listed on theLondon, Hong Kong, New York and Paris stock exchanges and its shares areheld by around 19 , shareholders in some 1 countries and territories(HSBC Gains). It also reported these results. ||Operating Margin | 6 .3% | 69. dollars, and offer exposure to non-U.S. ||Net Profit Margin | 11.4% | 13.5% | 13.9% ||Diluted EPS ($) | .58 | 3.75 | 3.25 |(HSFC Annual Report) Balance Sheet|Item | Dec 1 |Dec |Dec 99 ||Cash | -- | -- | -- ||Net Receivables | -- | -- | -- ||Inventories | -- | -- | -- ||Total Current Assets | -- | -- | -- ||Total Assets | 695,877. This group reported revenues for 2 1 of$47,362, , . Vol.3647, Business Week International. Introduction Hongkong and Shanghai Banking Corporation Ltd. The reason that one ofAsia's primary banking facilities is headquartered in England is that theHongkong & Shanghai Bank was started in 1865 by Thomas Sutherland, a Scot,and some two dozen other European businessmen to finance and promoteBritish trade in opium, silk and tea in East Asian. Underscoring the popularity of ADRs, The Bank of New York-acommon ADR issuer-states "the number of Depository Receipt Programs hasgrown from 1 9 programs in 1988 to an estimated 1577 programs this year.During the same period, dollar trade volume of U.S. | 45,57 . The risk is twofold, coming both from theemployees of the institutions -- 687, in the case of HSBC - and theexternal environment. In the late 195 s Hongkong & Shanghai Bank's acquisitions included theBritish Bank of the Middle East (founded in 1889, now the Saudi BritishBank) and Mercantile Bank (with offices in India and Southeast Asia). HSBC plans listing on New Yorkexchange, Hong Kong Standard HSBC to offer foreign currency services in mainland branches. The bank added operations in North America to capitalize onbusiness between China and the US and Canada. These are the offices as ofDecember 31, 2 1. | 11,88 . The existing literature on both of these topics can be misleadinginasmuch as there usually appears some murkiness in the precise definitionsof what each of these concepts are. 3 ). Some banks counteract this possibilityby using software that echoes and tracks every keystroke made by anemployee at any terminal in the system. In this respect, something as simple, the value ofwhich is based on the value or values of one or more underlying assets orindexes of assets. Following the 1984 agreement to return Hong Kong to China,Hongkong & Shanghai Bank began bought London securities dealer James Capel& Co. ||Cost of Goods Sold| -- | -- | -- ||Gross Profit | -- | -- | -- ||Gross Profit | -- | -- | -- ||Margin | | | ||SG&A Expense | -- | -- | -- ||Depreciation & | -- | -- | -- ||Amortization | | | ||Operating Income | 28,536. Acceptance Reviews occur at all levels inthe system hierarchy. The easiest way to achieved this isto determine specific control gates at which point, the buyer (in thiscase, either the Holding Company board or the purchaser of the derivative)can determine that the item presented for acceptance complies with itsspecification (Safarian, 2 2). | 38,789. Such wide-ranging reachalso exposes HSBC to more localized misfortunes, such as Argentina's 2 1peso devaluation which cost it half a billion dollars in currencyconversion losses alone. |% of total ||Treasury bills |18, |3 ||Debt securities |16 ,6 |23 ||Loans to banks |1 4,6 |15 ||Loans to customers |3 8,6 |45 ||Other |95,4 |14 ||Total |687,2 |1 |(HSFC Annual Report) Annual Financials Income StatementAll amounts in millions of US Dollars except per share amounts.|Item | Dec 1 | Dec | Dec 99 ||Revenue | 47,362. and B. Prasad (1999, Spring). Usually when the topic of bank risk and employees iswritten about, the name of Nick Leeson appears, either as a main topic or afootnote. exchange, quote and trade in U.S.dollars, convert their dividends to U.S. Later, in response to the slowingeconomy, it froze the salaries of 14, employees (HSBC Online) Project Challenges Since financial institutions handle money in all of its forms, and,since human beings have a great desire to possess money in all of itsforms, perhaps the greatest risk that financial institutions face is how toprotect themselves from humans. In1965, the company bought 62% of Hang Seng, Hong Kong's second largest bank.It also added new subsidiaries, including Wayfoong (mortgage and small-business finance, 196 ) and Wardley (investment banking, Hong Kong, 1972)(Richebacher, 2 ). 22 Wysocki,R.K. The potential power of HSBC that would derive from China's entryinto the WTO are lessened somewhat by the world wide economic shrinkage .For instance, the projections for revenues have been less. | 48,975. ||Short-Term Debt | 15,48 . HSBC has more than7, offices in about 8 countries, providing consumer and businessbanking services, asset management, investment banking, securities trading,insurance, and leasing. And when weanalyze the financial ratios, the only true way to perform baselineanalyses, we see a company that is highly leveraged (HSBC Eyes). Accordingly, the following organizations began reporting under theHSBC Banner: Hang Seng Bank Limited, HSBC USA Inc., HSBC Bank of the MiddleEast, HSBC Bank plc, Heng Seng Bank Limited, HSBC Bank Australia Limited,HSBC Bank Canada, HSBC Bank Brasil S.A.- Banco Multiplo, HSBC Malaysia,HSBC Asset Management (Taiwan) Ltd (formerly China Securities InvestmentTrust Corporation,); HSBC Bank Australia Limited; HSBC Bank Egypt S.A.E.,HSBC Bank Malaysia Berhad, Crйdit Commercial de France S.A., HSBC AssetFinance (UK) Limited, HSBC Bank AS, HSBC Bank Middle East, HSBC Bank plc,HSBC Guyerzeller Bank AG, HSBC Insurance Brokers Limited and HSBCInvestment Bank plc. (1999, Sept. Fraud is by andabout professionals who want to hurt you with stronger cannon. East Asia in Transition: Economic and SecurityChallenges (HSBC Bank). Understanding the empirical power of real estate as a bound asset, theprimary derivative created by the board would be an asset-based mortgagebundling investment trust that would deal with new construction in Asiannations. Importance of Project Scheduling While based in London, the executives of the Hongkong & Shanghai Bankturned its attention to the development of derivatives. The game plan, in fact, closely resembles Citigroup' s. 68. HSBC cuts exposure to ailing trio: HSBC Holdings has been forced toreduce exposure to the International Monetary Fund-assisted countries ofIndonesia, South Korea and Thailand. Often ignored is thefact that Leeson had also made numerous other investments that had madesignificant gains for the company. However, HSBC's plans to buy acontrolling stake in Bangkok Metropolitan Bank fell through before theyear's end. Richebacher, R. (2 2). Along withowning the Hongkong and Shanghai Banking Corporation Ltd., HSBC also ownsFrance's CCF, and 62% of Hong Kong's Hang Seng Bank. Financial Systems Analysis In the late 197 s and into the 198 s, China began opening to foreignbusiness. These ADRs offer a way for investors to diversify their equityholdings, Sponsored ADRs list on a U.S. % ||Net Income | 5,4 6. HSBC doesbusiness in Central, North and South America, though Asia traditionallyaccounts for about one-half of the firm's revenue. %) |(HSFC Annual Report)In 2 the company unveiled several online initiatives, including Internetventures with Cheung Kong (Holdings) and Merrill Lynch, and bought CCF(then called Crйdit Commercial de France). 2 1 Summary|Item |% of total | ||Securities |18 | ||Loans |57 | ||Fees and commissions |18 | ||Trading |3 | ||Other |4 | ||Total 1 | | ||2 1 Assets | | ||Item |$ mil. Algeria (1); Angola (2); Argentina (226; Armenia (2);Australia 44); Azerbaijan (1); Bahamas (1 ); Bahrain (4); Bangladesh (4);Belgium (4); Bermuda (2); Brazil (1,632); British Virgin Islands (1);Brunei Darussalam (14); Canada (165); Cayman Islands (4); Channel Islands(25); Chile (2); People's Republic of China (22); Cote d'Ivoire (1); Cyprus(159); Czech Republic (1); Egypt (14); France (79 ); Germany (12); Ghana(1); Greece (57); Guam (1); Hong Kong SAR (427); India (37); Indonesia(15); Iran (1); Ireland 6); Isle of Man (4); Israel (3); Italy (13); Japan6); Jordan (3); Kazakhstan (1); Korea, Republic of (1 ); Lebanon (7);Libya (1); Luxembourg (7); Macau SAR 6); Malaysia (42); Maldives (1); Malta(61); Mauritius (13); Mexico 14 ); Monaco (2); Morocco (1); Mozambique(2); Namibia (1); Netherlands (1); New Zealand (7); Oman (7); Pakistan(2); Palestinian Autonomous Area (1); Panama (16); Philippines (22); Poland(2); Qatar (3); Russia (3); Saipan (1); Saudi Arabia (8 ); Singapore (27);South Africa (12); Spain (7); Sri Lanka (1 ); Sweden (2); Switzerland (17);Taiwan 2 ); Thailand (2); Turkey (163); Uganda (2); United Arab Emirates(16); United Kingdom (1,765); United States of America (1,946); Uruguay(4);Venezuela (1); and Vietnam (1).(2 1 Annual Report). One of the problems that Sweeney sees is that most banks haveelaborate cash-handling security measures but ignore the far easier way of"stealing" by using the computer. References About HSBC online athttp://www.hsbc.com/code/tools/site/Renderer.jhtml;jsessionid=IGXB2TB5RYEXRQFIYN SGWQ?cp=/public/groupsite/about_hsbc/en/introduction_to_the_hsbc_group.html&bu=groupsite&toolName=about_hsbc&&isPc=false&bt=&pId= f1d82 -eb88-11d6-bc4f- 8 2 c629df Adler, M. (1999, Feb. ||Leverage Ratio |14.58 |22.12 | 5.77 ||Total Debt/Equity | .87 | 2.74 | 1.44 ||Interest Coverage | -- | 1.2 | 1.9 |(HSFC Annual Report) Per Share Revenue Data|Per Share Data ($) |HSBC | Industry1 | Market2 ||Revenue Per Share |22.57 | 19.23 |21.22 ||Fully Diluted Earnings Per Share| .38 | .84 | .59 ||from Total Operations | | | ||Dividends Per Share | 2.67 | .83 | .43 ||Cash Flow Per Share | -- | 1.32 | 1.87 ||Working Capital Per Share | -- | -- | .1 ||Long-Term Debt Per Share | 13.86 | 29.72 |1 .94 ||Book Value Per Share | 27.52 | 12.6 | 9.95 ||Total Assets Per Share |4 1.26 |278.74 |57.45 |(HSFC Annual Report) Growth Rates|Growth Rates | HSBC | Industry1 | Market2 ||12-Month Revenue Growth |(19.4%) | (7.3%) | .6% ||12-Month Net Income Growth |(33.5%) | (36.7%) | (6.6%) ||12-Month EPS Growth |(9 .6%) | (56.3%) | 195. The sections of this analysis will includeHSBC baseline analyses, baseline business, WBS, and Critical Path Analyses. They're both betting that they can cross-sell financial products, from credit cards to investment funds, around the globe (Capell, 1999, 65). Figures for actual computer theft are closely guarded, andseldom revealed since most institutions prefer to absorb the loss as a costof doing business, rather than have its laxity revealed (HSBC to cut 1998). In this case, thedevelopment of derivatives could be seen as examples of product developmentsince they are built on specific foreign exchange guidelines. Part of the growth success of HSBC has been its willingness to becomea "wired" bank, and a great deal of its success is attributed to itselectronic banking services (Hoovers Online). Haroldson, R.K. |535,731. Findings HSBC Holdings plc is one of the world's largest banking and financialservices organizations, with an international network comprises some 8,4 offices in 81 countries and territories in Europe, the Asia-Pacific region,the Americas, the Middle East and Africa. Sweeney (2 ) writing in U.S. (1998, Sept. The Richebacher Letter, 9-11 Safarian, A. That concept of the "principal amount outstanding" summarizes themain problem with derivatives (Adler & Prasad, 1992). Effective Project Management. exchange-listed ADRsincreased from $41 billion to $5 3 billion, an increase of 1,127 percent in11 years" (Adler & Prasad, 1999, 32). HSBC has also announced plans to buy Mexico'sGrupo Financiero Bital. Toronto: Canada Papers on Asia Sweeney, P. The shares are traded on the New York Stock Exchange in theform of American Depositary Receipts (ADR). In 2 1 HSBC agreed to pick up Barclays Bank's 13 branches andfund management operations in Greece. Performance Expectations By establishing strict accounting design systems, using many elementsof baseline measurements and controls the board and HSBC were prepared forthe 196 s by having conceptual profit machines in place (Safarian, 2 2).Although the policy of expansion was to take over a bank or an existingbanking network and allow it to perform independently, that independencehad to happen within strict internal project reporting systems. | 33,4 8. (1986) and the UK's third largest Midland plc (1992). The topic cannot be treated extensivelyhere, but it is essential to realize that HSBC became one of the primaryinnovators of the concept of profiting off of derivatives. In 1867, a Londonbranch was open, and, as will be shown below, unsettled affairs in Chinadrive the bank out of China and then its main headquarters became London. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.