HSBC 2001 Annual Report Download - page 11

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fabric of the financial services sector and views it as
an opportunity to attract new customers from all over
the world and to serve its existing customers better.
E-commerce will enable HSBC to reconfigure its
business in ways which provide higher quality
customer services in a more efficient manner. As an
international group, HSBC plans to link its
customers to the full range of international services
and manage their processing wherever it chooses;
HSBC views this as a sustainable competitive
advantage.
History and development
The founding member of HSBC, The Hongkong and
Shanghai Banking Corporation was established in
Hong Kong and Shanghai in 1865. The bank
expanded rapidly, with an emphasis on building up
representation in China and the rest of the Asia-
Pacific region, while also establishing a presence in
the major financial and trading centres in Europe and
America.
Changes in the post-Second World War era saw
a scaling back of operations in China. In the mid-
1950s, The Hongkong and Shanghai Banking
Corporation embarked on a strategy of pursuing
profitable growth through acquisition as well as
organic development – a combination that has
remained a key feature of HSBC’s approach ever
since.
The Hongkong and Shanghai Banking
Corporation purchased The Mercantile Bank of India
Limited and The British Bank of the Middle East
(now HSBC Bank Middle East) in 1959, increasing
HSBC’s interests in the rest of Asia-Pacific and the
Middle East. In 1965, The Hongkong and Shanghai
Banking Corporation acquired a 51 per cent interest
(subsequently increased to 62.14 per cent) in Hang
Seng Bank, consolidating its position in Hong Kong.
Hang Seng Bank, founded in 1933, is the second-
largest listed bank in Hong Kong. By the early
1980s, The Hongkong and Shanghai Banking
Corporation, having established itself as the pre-
eminent international financial services provider
across the Asia-Pacific region, began to direct greater
attention to expansion elsewhere, particularly Europe
and the United States.
In the late 1970s and the 1980s, The Hongkong
and Shanghai Banking Corporation began to focus its
acquisition strategy on the United Kingdom,
purchasing full ownership of the UK merchant bank
Antony Gibbs in 1980, which brought with it an
insurance business and an established broker in the
Lloyd’s of London insurance market. To enhance its
capital markets capabilities, The Hongkong and
Shanghai Banking Corporation acquired a
controlling interest in the well-known London-based
international securities company, James Capel & Co.
Limited, in 1986.
The Hongkong and Shanghai Banking
Corporation entered the US market in 1980 by
acquiring a 51 per cent interest in Marine Midland
(now HSBC USA Inc.) and the remaining interest in
1987. Carroll, McEntee & McGinley Inc. (renamed
HSBC Securities (USA) Inc.), a primary government
securities dealer in the United States, was acquired in
1983. Marine Midland acquired JP Morgan’s US
dollar clearing business at the end of 1996 and First
Federal Savings and Loan Association of Rochester
in 1997, both of which were integrated into existing
operations.
In 1981, The Hongkong and Shanghai Banking
Corporation incorporated its existing Canadian
operations as Hongkong Bank of Canada, one of the
first foreign-owned banks in Canada. HSBC Bank
Canada, headquartered in Vancouver, has since made
numerous acquisitions, expanding rapidly to become
the largest foreign-owned bank in Canada and the
seventh-largest overall at 31 December 2001.
In 1987, The Hongkong and Shanghai Banking
Corporation purchased a 14.9 per cent interest in
Midland Bank plc (now HSBC Bank plc),
established in 1836 and one of the United Kingdom’s
principal clearing banks. In 1991, HSBC Holdings
plc was established as the parent company of HSBC
and, in 1992, HSBC Holdings purchased the
remaining interests in Midland. In connection with
this acquisition, HSBC’s head office was transferred
from Hong Kong to London in January 1993 and the
Bank of England became HSBC’s principal
regulator.
In 1997, HSBC assumed selected assets,
liabilities, and subsidiaries of Banco Bamerindus do
Brasil S.A. following the intervention of the Central
Bank of Brazil. Headquartered in Curitiba, Banco
Bamerindus do Brasil S.A. was the fifth-largest bank
in Brazil (measured by assets), with the second-
largest branch network in the country at the time of
acquisition. HSBC also acquired Grupo Roberts,
based in Buenos Aires and one of the largest
privately owned financial services groups in