HSBC 2001 Annual Report Download - page 18

HSBC HOLDINGS PLC
Description of Business (continued)
16
Hong Kong
Hong Kong contributed US$3,883 million, or 49 per
cent, of HSBC’s profit on ordinary activities before
tax in 2001 compared with US$3,691 million in
2000.
HSBC’s principal banking subsidiaries in the
Hong Kong SAR are The Hongkong and Shanghai
Banking Corporation Limited and Hang Seng Bank,
in which HSBC has a 62.14 per cent stake. The
Hongkong and Shanghai Banking Corporation is the
largest bank incorporated in Hong Kong and HSBC’s
flagship bank in the Asia-Pacific region. It is also
one of the Hong Kong SAR’s three note-issuing
banks, accounting for more than 64 per cent of the
Hong Kong banknotes in circulation in 2001. The
Hongkong and Shanghai Banking Corporation has a
substantial market share in Hong Kong and operates
through 212 outlets in 177 locations. Hang Seng
Bank has more than 150 branches and automated
banking centres in the Hong Kong SAR.
Both banks offer their personal customers an
extensive range of financial services with the aim of
satisfying customers’ needs to grow, manage and
protect their wealth. Following the successful launch
of the HSBC Premier service in 2000, HSBC added
seven HSBC Premier Centres and 200 personal
bankers during 2001 to meet the demands of a
growing client base and to offer tailored wealth
management solutions to HSBC Premier customers.
Hang Seng Bank’s Prestige Banking and the Bank-
In-One Account provide a combination of banking,
investment and financial services in one package. To
reach out to different customer segments, the
M.I.Kid Account, targeting parents with young
children, and Femina Banking, an integrated account
targeting women, were launched in 2001.
The final phase of interest rate deregulation in
Hong Kong, relating to interest on demand deposits,
came into effect on 3 July 2001. HSBC introduced
revised account services and pricing structures to
encourage customers to consolidate their account
relationships with HSBC and free banking options
for customers who choose to use lower costing
electronic and internet banking channels. In 2001’s
uncertain investment market, HSBC achieved strong
sales of unit trusts with the promotion of 13
guaranteed/capital-secured funds designed to meet
customers’ demands to protect their investment
capital but maximise their potential return in the low
interest rate environment. Insurance business is a key
focus in HSBC’s wealth management strategy.
Significant growth in insurance premiums was
achieved following the expansion of the dedicated
sales force and the use of telephone sales. Hang Seng
Bank also continued to widen its investment and
insurance product range to enhance its wealth
management services. The launch in 2001 of 14
investment funds, which included 12 capital-
guaranteed funds, was well received and increased
the total number of sub-funds in the Hang Seng
Investment Series to 31.
In a year of intense competition for quality
assets, HSBC succeeded in acquiring a leading
market share in credit card issuing. Including credit
cards issued by Hang Seng Bank, HSBC remained
the largest card issuer in Hong Kong with 2.7 million
cards in circulation, and led the market in cardholder
sales and outstandings. To improve operational and
cost efficiency, a new and enhanced card processing
system was developed and implemented, and
application processing was migrated to HSBC’s
processing centre in Guangzhou.
HSBC provides a comprehensive range of
banking products and services to meet the needs of
large and small businesses in Hong Kong, including
trade services, payments and cash management
services, investments, insurance, electronic banking,
leasing and factoring, and custody business. For
companies with more sophisticated finance needs,
investment banking and capital market services are
available. In 2001 there were significant investments
in special products and servicing channels tailored
for business customers. These investments included
physical and electronic service outlets, as well as
additional staff resources, and will continue in 2002
with particular emphasis on delivering bespoke
internet banking for small and medium-sized
businesses. Such developments demonstrate HSBC’s
commitment to business customers regardless of
size.
Following the introduction of the Mandatory
Provident Fund (MPF) scheme in December 2000,
HSBC has used its banking infrastructure as a
competitive advantage to good effect and its
extensive distribution network has been
complemented by an award-winning MPF internet
site. As a result, HSBC has acquired the largest
market share of MPF business in Hong Kong.
Since the inception of online@hsbc in August
2000, HSBC has acquired the largest online banking