HSBC 2006 Annual Report Download - page 16

HSBC HOLDINGS PLC
Report of the Directors: Business Review (continued)
Business highlights
14
channel, ‘mortgage services’, which acquires
loans from correspondent banks and mortgage
brokers. Credit quality in the majority of other
portfolios in the US was relatively stable. In
Taiwan, a short-term increase in the first half of
2006 arose from government-sponsored
measures to relieve over-indebtedness in the
consumer sector, which had the effect of
significantly increasing the number of customers
successfully obtaining some element of debt
restructuring. In Hong Kong, there was a return
to a more normal level of charges following a
net release in 2005; credit quality remained
stable. In the UK, while overall charges as a
percentage of lending were broadly stable, there
was an increase in the consumer finance lending
book, reflecting rising personal bankruptcies
and Individual Voluntary Arrangements
(‘IVA’s), and the effect of increased consumer
indebtedness on delinquency.
• Responding to a clear shift in customer
preferences, HSBC continued to emphasise the
development of direct channels within its
distribution capabilities. Websites were updated
to offer additional features, personalised content
and improved customer accessibility. The new
technology behind these developments gives
HSBC enhanced targeting and analytical
insights to better meet customer needs and drive
sales growth. Overall, online personal customer
numbers rose by nearly 40 per cent to 16 million
and online sales volumes increased by more
than 55 per cent compared with 2005.
• Following its successful launch in the US in
2005, HSBC’s direct banking and savings
proposition, HSBC Direct, was introduced in
Taiwan – a first for HSBC in Asia. In the US,
HSBC Direct customer numbers passed
343,000, with deposits exceeding
US$7.2 billion.
• To further its direct banking strategy, HSBC
introduced 2,300 advanced self-service
terminals offering a wider range of services than
traditional ATMs (automated teller machines),
including payments, enquiry and sales features.
The functionality of over 11,000 traditional
ATMs was also enhanced.
• The number of customers using HSBC Premier
grew for the seventh consecutive year, to
1.8 million, an increase of 35 per cent compared
with 2005. This service is now available in
36 countries.
• An innovation was the launch of seven-day
opening in selected UK, US and Hong Kong
branches. Investment in the retail network
continued in Europe, North America and parts
of Asia-Pacific.
• In the latter, HSBC began to introduce its
Group-wide credit card system, expanded
consumer finance in India and Indonesia, and
agreed retail finance arrangements in mainland
China and Australia.
• The efforts described above were recognised by
Retail Banker International in naming HSBC
the ‘Best Retail Bank’ globally. HSBC was also
named the ‘Best Global Bank - Best Consumer
Bank’ by Global Finance magazine. HSBC’s
online enhancements helped earn the ‘Best
Global Consumer Internet Bank’ award in the
Global Finance Awards.
Europe
• In the UK, HSBC refined its approach to
segmenting its customer base and aligned its
products and distribution capabilities to better
serve these segments. It refurbished
104 branches, increased the number of non-
branch ATMs by over 35 per cent, including
135 in Marks & Spencer stores, and rolled out
some 1,450 advanced self-service machines.
This latter initiative was recognised by The
Banker in awarding HSBC the international
‘Technology Award for New Channels’.
• In France, a focus on reinforcing HSBC’s
profile following the 2005 rebranding exercise
drove a marked increase in brand awareness.
HSBC was named ‘Best in Class’ among French
retail banks in a number of categories in the
Cosmosbay Vectis Survey.
• HSBC opened new branches in the UK, Turkey,
France and Malta. In Eastern Europe, HSBC
developed its consumer finance operations with
the establishment of a regional head office and
management team.
Hong Kong
• Efforts to expand the scope of internet banking
and increase the proportion of transactions
conducted online proved successful. Fewer than
4.3 per cent of all transactions were conducted
through the branch network in 2006, while the
proportion of sales conducted online reached
nearly one quarter. HSBC was named the ‘Best
Consumer Internet Bank’ in Hong Kong in the
annual Global Finance Awards.
• Wealth management, including insurance, was a
focal point in 2006, and enhancements to