HSBC 2002 Annual Report Download - page 23

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August and further enhancing the service later in the
year with the addition of online trade functionalities.
The initial response from customers has been
encouraging, with e-channel transaction volumes
continuing to rise. Going forward, HSBC will
continue to devote resources to the further
improvement of service levels and enhancement of
its product range to meet the investment and
insurance needs of commercial customers,
demonstrating its ongoing commitment to business
customers regardless of their size.
HSBC’ s Corporate, Investment Banking and
Markets business in Hong Kong reported strong
results in 2002. A diversified portfolio of
businesses has helped it ride the economic
downturn well, with strong profits in its treasury
and capital markets business more than
compensating for the slow-down in equity
markets. The same low interest rate environment
that has squeezed margins in HSBC’ s commercial
and retail lending business helped the treasury
area’s well-positioned balance sheet to post record
accrual income in 2002.
Dealing profits fell, primarily in the area of
interest rate trading, against a backdrop of
widening credit spreads and concerns over
economic growth. This was, however, offset by
foreign exchange revenues which remained
robust. In addition, HSBC focused on its ability to
leverage off its strong and growing customer
franchise, by offsetting thinner trade flows with a
stronger emphasis on higher margin derivative
products. The low interest rate environment has
led to increasing customer demand for yield
enhancement products, and HSBC’s wealth
management group was well positioned to take
advantage of this trend. HSBC added resources to
this area to build momentum and increase market
penetration in 2003.
HSBC’s debt finance group continued to build
on its superior distribution capability, successfully
completing several high-profile transactions in
2002 and reinforcing its strong position in the
Hong Kong market.
An increasing proportion of HSBC’s client
business in the foreign exchange, fixed income
and money markets continues to be migrated to
electronic dealing channels, improving transaction
ease and speed and reducing cost.
Surveys indicate that HSBC has the largest
online banking market share in Hong Kong with over
470,000 registered users (up by 60 per cent over
2001). The e-channel proposition was enhanced
during 2002 with the introduction of new solutions
and applications, and a new investment page, all of
which led to a 33 per cent year-on-year increase in
monthly website visits. Online@hsbc has won many
awards and has achieved differentiation in the market
through its wide range of more than 50 online
services, including online share trading, IPO
registration and primary bonds subscription services,
instant approval for a range of insurance products,
and personal loans, electronic bill presentation and
payment services.
Hang Seng Bank’s comprehensive range of
internet banking services has similarly become an
important part of its multi-channel delivery network.
At the end of 2002, more than 250,000 customers
were registered for its Personal e-Banking Services,
internet transactions had grown to more than 14 per
cent of total transactions, and online share trading
accounted for 55 per cent of total securities
transactions. Hang Seng Bank continues to enhance
its e-banking services to meet customer expectations.
Business e-banking services, including online fund
transfers, cash management and trade services, were
introduced in 2002 to help commercial customers
manage their company finances more efficiently.
Rest of Asia-Pacific (including the Middle
East)
The rest of Asia-Pacific region contributed US$1,260
million, or 13.1 per cent, to HSBC’s profit on
ordinary activities before tax in 2002 compared with
US$1,088 million in 2001.
Asia-Pacific
Outside Hong Kong, HSBC conducts business in the
Asia-Pacific region primarily through branches and
subsidiaries of The Hongkong and Shanghai Banking
Corporation, with particularly strong coverage in
mainland China, India, Indonesia, Korea, Singapore,
Taiwan and Thailand; through HSBC Bank Australia
Limited in Australia; and through HSBC Bank
Malaysia Berhad, which has the second largest
presence of any foreign-owned bank in Malaysia.
Both The Hongkong and Shanghai Banking
Corporation and Hang Seng Bank operate in
mainland China, offering personal banking and
commercial services. The Hongkong and Shanghai