HSBC 2014 Annual Report Download - page 6

HSBC BANK PLC
Strategic Report: Purpose and Strategic Objectives (continued)
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business principles delineate our character and define
who we are as an organisation and what makes us
distinctive. We bring these values and business principles
to life through our day-to-day actions.
The emphasis we place on adhering to high behavioural
standards and doing the right thing has led HSBC to
establish two Board committees: (i) the Conduct &
Values Committee to oversee the design and application
of HSBC’s policies, procedures and standards and ensure
that we conduct business responsibly and consistently
adhere to HSBC Values; and (ii) the Philanthropic and
Community Investment Oversight Committee, which will
focus on the Group’s philanthropic activities, largely
monetary donations made to charitable organisations
and the contribution of staff time to volunteering.
Business principles
• Financial strength – maintain capital strength and
liquidity;
• Risk-management – be enterprising and commercial,
understand and be accountable for the impact of our
actions, take prudent decisions;
• Responsiveness – be fast and responsive, make
principles-led decisions;
• Performance-focus – drive leading, competitive levels
of performance, act with urgency and intensity,
prioritise, simplify;
• Efficiency – focus on cost discipline, process efficiency
and quality of execution;
• Quality – pursue excellence;
• Customer-focus – provide outstanding customer
experience;
• Integrated – align the Group and break down silos;
and
• Sustainability – take a long-term outlook, understand
impact of actions on stakeholders, brand and
reputation.
Market presence
Our business model is based on an international network
connecting and serving a cohesive portfolio of markets.
Our comprehensive range of banking and related
financial services is provided by the bank, its operating
subsidiaries and associates. Services are primarily
delivered by domestic banks, typically with local deposit
bases.
The strategic focus of our capital deployment will
continue to be the UK, one of HSBC’s two home markets,
and the priority markets of Germany, France and Turkey.
Our legal entities are regulated by their local regulators
and on a Group-wide basis we are regulated from the UK
by the Prudential Regulation Authority (‘PRA’) for
prudential matters (safety and soundness) and by the
Financial Conduct Authority (‘FCA’) for conduct
(consumer and market protection).
Investment criteria
We use the HSBC six filters to guide our decisions about
when and where to invest. The first two – international
connectivity and economic development – determine
whether the business is strategically relevant. The next
three – profitability, efficiency and liquidity – determine
whether the financial position of the business is
attractive. The sixth filter – the risk of financial crime –
governs our activities in high risk jurisdictions, and is
applied to protect us by restricting the scope of our
business where appropriate.
Decisions over where to invest additional resources have
three components:
• Strategic – we will only invest in businesses aligned to
our strategy, mostly in our home and priority growth
markets and in target businesses and clients;
• Financial – the investment must be value accretive for
the Group, and must meet minimum returns, revenue
and cost hurdles; and
• Risk – the investment must be consistent with our risk
appetite.
HSBC conducts an annual geographic and business
portfolio review following the six filter approach to
update its market and business priorities.