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Q: HSBC SWOT Analysis ( Answered,   0 Comments )
Question  
Subject: HSBC SWOT Analysis
Category: Business and Money
Asked by: mswajanen-ga
List Price: $20.00
Posted: 14 Nov 2006 09:31 PST
Expires: 14 Dec 2006 09:31 PST
Question ID: 782667
I would like an up to date SWOT analysis on HSBC, with facts to "back"
up the analysis (newspaper articles, graphs, etc.)
Answer  
Subject: Re: HSBC SWOT Analysis
Answered By: keystroke-ga on 14 Dec 2006 08:26 PST
 
Hello mswajanen,

Thank you for your interesting question.  Here are the strengths,
weaknesses, opportunities and threats of HSBC, "The World's Local
Bank."

Strengths--

*International Finance.
Since HSBC is a multinational company itself, it is well-qualified to
advise other companies on aspects of international business.  With
offices around the world, for the cosmopolitan client, HSBC often
cannot be beaten in this area.  HSBC knows how to succeed in M&A and
organic and effective growth-- it was mostly an Asian bank until it
took over a UK bank in 1992 and now has become the world's
second-largest bank by profit.

*China.
HSBC is the "Hong Kong Shanghai Banking Corporation" and it has 140
years of experience in China.  Since China is the place to be nowadays
for businesses and banks, HSBC benefits for being both an old Chinese
company and trusted by the Chinese people.  The best news for HSBC is
that as other companies grow in China, it does, too, because it gains
new clients and new global opportunities with each passing day.  HSBC
has the largest network of any foreign bank in China and deeply
understands the Chinese market and customer.  In a world that is
increasingly going China's way, this is quite a boon to HSBC.

*Listed in London.
HSBC is primarily listed on the London and Hong Kong stock exchanges,
which saves the company much grief in complying with new American
Sarbanes-Oxley laws.  Many companies have chosen to list on foreign
exchanges other than America because of the expensive new regulations.

*Record profits.
Last year, HSBC experienced the most profits ever for a UK high street
bank, with profits of 11.5bn($20.97bn) for the whole year.

---------------------

Weaknesses-

*Branding.
While it is certainly a global company, HSBC came late to the game on
deciding to perform an integrated marketing strategy and capitalize on
its global brand.  Because it had set up so many different banks in
different countries at different times over a hundred year period, it
set them up under different names-- Hong Kong Bank of Canada, British
Bank of the Middle East, HSBC Banco Roberts.  Not even all of these
banks, prior to 1998, carried the HSBC logo.  In 1998, they were all
branded together, but the previous lack of branding and the name
changes may have hurt HSBC in brand recognition.  Customers may have
thought that HSBC was taking over their local bank and not realized
that HSBC had already been serving them for decades.  In any case, the
re-branding was an overdue move that should have occurred before 1998.

*Record profits ending.
As is usually the case, record profits can only last so long.  HSBC
announced in December 2006 that it was doing just as well as last
year, but not as well in revenues.  It announced that each year, its
bad debt rises.  Other banks' shares fell as well on the news.

---------------------

Opportunities--

*The Middle East.
Other banks are running scared of this region.  However, HSBC has run
its regional business locally and been rewarded for its efforts with
numerous awards and honors for the Middle East market.  HSBC is a
trusted name there, and the company has taken advantage of Iraq's new
democracy by creating a presence in the country.  HSBC is the largest
international bank in the Middle East.

*Emerging economies.
In addition to the growing Chinese middle class, Brazilians and
Indians are beginning to emerge as growing consumers, and therefore
growing consumer spenders.  Some denizens of these countries
previously did not even own a bank account, but companies like HSBC
are poised to move in and take advantage of the growing middle class
in these areas.  In places like Argentina and Turkey, HSBC experienced
pre-tax profits of 50% last year.  This is where it is growing the
most.  By investing in these countries, HSBC can offset problems it
may have as spending in the US and UK declines.

----------------------

Threats--

*Downturn in American spending.
As interest rates rise and the housing boom ends, Americans are
predicted to rely less on consumer credit and more on their saving
skills to get by.  The drop in American spending will be bad for the
global economy as a whole, and HSBC will certainly be affected.  In
2005, HSBC pretax profits rose 5% to $10.64bn (6bn) for the first six
months of the year, largely on the rise in consumer finance for
growing consumer spending.

*Employees striking.
Last year, British employees held a strike involving 1,500 workers at
HSBC branches in London.  At its annual meeting, striking workers
stood outside, handing out bags of nuts and saying that they are paid
"peanuts" while HSBC experiences record profits.  Strikes such as
this, especially in union-conscious Europe, are bad for image reasons
and HSBC needs to take action to ensure that its workers are happy
just as its customers are.

*Email viruses.
Last year, HSBC Group's CEO announced that HSBC received tens of
thousands of email viruses a day and must spend great amounts of money
to prevent these from causing systemwide damage.  As most banking is
done on computers, even one virus could cripple HSBC.  On their worst
day in 2004, the bank received 100,000 attacks.

*Identity theft.
With a trillion dollars in managed assets, taking over HSBC is a
cracker's dream.  HSBC has to remain on the front lines of security
and protect its customers, at the same time reassuring them that
online banking is safe.  In August 2006, HSBC was accused, despite its
claimed airtight security, of having left its online customers open to
a security glitch for two years without fixing.  Researchers at
Cambridge University claimed that any HSBC account could be broken
into within nine attempts.

----------------------

Sources:

About HSBC--- Awards
http://www.uae.hsbc.com/1/2/ALL_SITE_PAGES/about-hsbc/awards

HSBC Oman
http://www.oman.hsbc.com/hsbc/oman_wel

HSBC Launches China Section
http://www.hsbcnet.com/hsbc/solutions/announcements/announce-hsbcnet-launches-china-section

HSBCNet-- China
http://www.hsbcnet.com/hsbc/china

"HSBC To Establish Global Brand"
Business Wire,  Nov 27, 1998  
http://www.findarticles.com/p/articles/mi_m0EIN/is_1998_Nov_27/ai_53279812

BBC News
"Global consumer trade boosts HSBC"
http://news.bbc.co.uk/2/low/business/4734375.stm

BBC News
HSBC Strike
http://news.bbc.co.uk/2/low/business/4585219.stm

BBC News
"HSBC bank unveils record profits"
http://news.bbc.co.uk/2/hi/business/4777714.stm

CNN Money
"London shares close up, miners offset Tesco, HSBC weakness; Wall St firm UPDATE"
http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-12582884.htm

CNet
"International bank HSBC deluged by viruses"
http://news.com.com/International+bank+HSBC+deluged+by+viruses/2100-7349_3-5655520.html

ZDNet
"HSBC accused of 'scandalous' security glitch"
http://news.zdnet.co.uk/security/0,1000000189,39280707,00.htm

Search terms:
hsbc strengths
hsbc record profits
hsbc weaknesses
hsbc threats

If you need any additional clarification, let me know and I'll be glad
to assist you.

--keystroke-ga
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