HSBC is one of the world's largest financial services companies, with an international network that still spans some 65 countries, although several under-performing territories have been exited since 2011. Until the 1990s the group was best-known as Hong Kong's biggest financial institution, originally founded in the 19th century to finance trade between Asia and the West. But a string of acquisitions around the globe, starting with the UK's Midland Bank, transformed the business into arguably the world's most broadly based financial institution, with significant operations on every continent. Later purchases included US bank Republic New York, consumer finance lender Household International, CCF in France and Grupo Bital in Mexico, all absorbed into the main HSBC umbrella brand. Though less badly affected by the 2008 banking crisis than some competitors, the former Household operations in the US proved a massive drain on otherwise strong performance. A series of regulatory problems have led to other concerns, and the bank began pulling out of less profitable territories to refocus its attention on Asia and only more lucrative international markets. Its woes have been exacerbated by the US-China trade war, as well as turbulence in the board room, with several changes of both chairman and CEO. In 2019, CEO John Flint was ousted after just a year and a half in his role. Noel Quinn replaced him. Revenues that year were $56.1bn, with net profit of $8.7bn. Profits are divided comparatively evenly between HSBC's three main businesses of retail banking, commercial bank and global markets, although retail banking is the largest by revenues. Despite the bank's broad geographical spread, Hong Kong alone accounts for almost a third of income, while Hong Kong and the UK combined account for more than half. Most of the group's worldwide operations now trade under a uniform HSBC brand. There are a handful of separately branded local satellite businesses. One such is UK-based First Direct, which was the country's first and still the leading 24-hour telephone bank, with over 1m customers. The main HSBC UK retail banking business operates separately. It is one of the big four principal UK clearing banks, offering a full range of personal and business banking services. Globally the group is also one of the world's biggest credit card issuers, operating consumer finance operations for multiple third-party retailers. In the UK, for example, it operates Marks & Spencer's M&S Bank. However, it has exited this sector in some territories, not least the US, where it sold its massive consumer finance division to Capital One in 2011 for $33bn.
Capsule checked 13th December 2019
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Adbrands Daily Update 18th Feb 2020: HSBC announced wide-ranging cost cuts and restructuring plans in order to reduce its exposure to non-core markets and activities. The moves reflect the need to counter the significant impact on its core operations in Hong Kong from the recent protest movement and in China from coronavirus. As a result, the bank will scale back its global investment and commercial banking businesses, merging some back-office operations and shedding less valuable assets. That resulted in a $7.3bn impairment charge in 4Q 2019, and a group net loss for the quarter. In addition, the high net worth private bank division will lose standalone status within the group and is being merged into global retail banking. HSBC will also cut back retail and commercial operations in the US and continental Europe. The cuts will lead to the loss of around 35,000 jobs worldwide over the next three years, or around 15% of staff. Revenues for 2019 rose 4% to $56.1bn, but net profit plunged by over 40% to $8.7bn.
Adbrands Daily Update 24th Jan 2020: "Home". Richard Ayoade returns in another delightfully quirky film for HSBC by Wunderman Thompson. Just as its predecessors did before the Brexit knell sounded, the new film sets out to remind us that we are all from somewhere else. Yet the tone of the campaign has subtly changed as the debate over EU membership raged. The first two ads in the series appeared to emphasise our European connections; this and its immediate predecessor appear rather less sure. We are citizens of the world now, not of Europe. Still, the point is well made. Home, after all, is where the heart is, and Ayoade is as always a charming and engaging front man.
Adbrands Daily Update 5th Aug 2019: HSBC unexpectedly ousted CEO John Flint after just 18 months, following a steady decline in the bank's share price exacerbated by the ongoing trade war between the US and China. "In an increasingly complex and challenging global environment, the board feels a change is needed to make the most of the opportunities before us," said chairman Mark Tucker. Head of commercial banking Noel Quinn takes over on an interim basis while a search is condusted for Flint's fulltime replacement. The bank also confirmed it would cut around 4,700 roles worldwide, equivalent to 2% of its global workforce.
Adbrands Social Media 23rd Oct 2018: Considering how it wholly dominates the daily conversation in Britain at the moment, Brexit is an issue that few advertisers have dared to tackle, presumably for fear of alienating one or other half of the country. One of the only campaigns to have dared in recent months has been the one J Walter Thompson London was running for HSBC with the wonderfully eccentric Richard Ayoade. This has seemed in the past to be solidly anti-Brexit, but with this latest incarnation - developed this time by Grey, though in partnership with JWT - we're not quite so sure. We imagine Brexiteers will be claiming it for their own with its promise of new horizons to be conquered. In truth, though, it's just pro-business. What's best for business is best for HSBC and the bank seems happy to let you make up your own mind about which side of the argument that might be.
Adbrands Weekly Update 17th May 2018: Ads Of The Week: "Connected Money". The fantastically oddball Richard Ayoade returns to front another excellent campaign for HSBC's UK retail banking business. We would love to hand all the credit here to agency J Walter Thompson London, but we suspect that much of the heavy lifting, at least in the script department, was done by Ayoade himself. He seems like the kind of performer you just point in the direction you require and then let him do his delightfully idiosyncratic stuff. Enjoy!
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