Case Study HSBC in 2015: Complex Global Operations and Downsizing Originally kno
ID: 365718 • Letter: C
Question
Case Study HSBC in 2015: Complex Global Operations and Downsizing Originally known as Hong Kong Shanghai Banking Corp, HSBC was founded in and bounds and became one of the largest banks in the world. In 2014, HSB 6.300 offices in 75 countries and was headquartered in London, U.K. During the Shanghai i past 150 years, HSBC grew by leaps same year, HSBC was of $2.68 trillion after Industrial and Commercial Bank of China ($2.95 trillion). Other top banks on the list included Deutsche Bank (Germany), Credit Agricole (France), BNP Paribas (Spain), Mitsubishi UFJ Financial (Japan), Barclays (U.K). and Chase (U.S.).1 The pace of change and competition in the gl industry is always dynamic and fierce. In emerging markets and developed countries, HSBC continued to be a visible brand name and dealt with the industry's traditional retail sector, commercial banking, global banking, and global private banking. In 2014, HSBC's market capitalization stood at $176.44 billion with revenues of $74.59 billion, and it employed 266,000 workers worldwide. No wonder HSBC's operations remained in major parts of the world and its main revenues came from commercial banking, retail banking, wealth management, and private banking. rated the second largest bank in the world with total a ssets During the 2008 global financial crisis, HSBC did lose money but was not bailed out in Europe and Asia and remained a visible business entity in the banking industry.2 The financial crisis created havoc in the banking industry, which witnessed systematic distress as well as spillover effects.3 The crisis also affected HSBC, which ended up losing money and customers. Unlike American banks, HSBC's operations were somewhat spared, but growth remained stagnant during this period. The bank closed its money-losing operations and sold a few assets. This was a major disruption in HSBC's history and weakened the bank's well-established business model. To deal with the 2008 financial crisis, HSBC embarked on a major reorganization that changed its strategy, corporate structure, and growth patterns. In 2011, HSBC trimmed its North American operations because of losses in the area of subprime lending.4 At the same time HSBC started expanding in emerging markets of Asia. China was selected to be the bank's major market for future growth. Other reorganization took place that aimed at mostly downsizing and trimming operations In February 2012, HSBC announced its financial results and said the bank had increased its net by 27 percent. This was clearly the result of HSBC's 2010 restructuring plan, which was designed in the post-financial crisis period Whereas HSBC trimmed its operations in North America, the bank's Asian markets witnessed a good increase in revenues because of growth in emerging markets.5 Financial Times called HSBC "the world's Asian bank."6 No wonder HSBC planned a major expansion in China and announced increasing its share in China's Bank of Communications. HSBC also expanded its branches in China frorm 110 locations to 800.7 This was a major part of the bank's reorganization that was initiated by HSBC's CEO Stuart Gulliver and his team from 2009 to 2010.8 Although competition was heightened because of the arrival of local andExplanation / Answer
How do you evaluate HSBC’s reorganization after the 2008 global financial crisis, its position in 2015 and its current position?
What did you learn from HSBC’s case when applying concepts and theories in this chapter?
The following concepts and theories were applied in this case study:
Compare and contrast HSBC and other multinational banks in global business.
HSBC’s competitors include JP Morgan, Citigroup, Wells Fargo, Bank of America, Industrial Commercial Bank (China), etc.
The strengths of HSBC listed below made it stand out among other multinational banks.