HSBC 2006 Annual Report Download - page 13

11
Page
Principal activities ....................................... 11
Strategic direction ....................................... 11
Customer groups and global businesses ...... 12
Personal Financial Services .................... 13
Commercial Banking ............................... 16
Corporate, Investment Banking and
Markets ................................................ 18
Private Banking ....................................... 20
Other ........................................................ 22
Analysis by customer group and global
business ................................................ 23
Geographical regions ................................... 26
Summary of geographical regions ........... 26
Competitive environment ......................... 27
Europe ..................................................... 31
Hong Kong ............................................... 48
Rest of Asia-Pacific .................................. 60
North America ......................................... 75
Latin America .......................................... 91
Other information ........................................ 106
Products and services .............................. 106
Property ................................................... 109
Legal proceedings .................................... 109
Principal activities
HSBC is one of the largest banking and financial
services organisations in the world, with a market
capitalisation of US$212 billion at 31 December
2006.
Through its subsidiaries and associates, HSBC
provides a comprehensive range of banking and
related financial services. Headquartered in London,
HSBC operates through long-established businesses
and has an international network of over 10,000
properties in 82 countries and territories in five
geographical regions: Europe; Hong Kong; Rest of
Asia-Pacific, including the Middle East and Africa;
North America and Latin America1. Within these
regions, a comprehensive range of financial services
is offered to personal, commercial, corporate,
institutional, investment and private banking clients.
Services are delivered primarily by domestic banks,
typically with large retail deposit bases, and
consumer finance operations. Taken together, the
five largest customers of HSBC do not account for
more than one per cent of HSBC’s income.
1 In 2006, the geographical segment presentation was
changed with the reclassification of Mexico and Panama
from North America to South America, and the renaming of
the latter as Latin America and the Caribbean (‘Latin
America’). Comparative data have been restated to bring
them into line with the presentation adopted in 2006.
The principal acquisitions made during the year
are described on page 369. There were no significant
disposals.
Strategic direction
HSBC’s strategic direction, as set out in its
‘Managing for Growth’ strategy, is to be the world’s
leading financial services company, with ‘leading’
meaning the HSBC brand is preferred to others and
HSBC’s corporate character is admired, its earnings
per share growth is dynamic and it holds leadership
positions in selected markets. Financial success is
measured by comparing the Group’s Total
Shareholder Return (‘TSR’) target against a
weighted TSR benchmark composed of a peer group
of banks.
To achieve its strategy, the Group has identified
seven priorities or ‘global pillars’ that will guide the
Group’s strategic initiatives in 2007 and 2008.
Success in achieving the priorities will be assessed
by reviewing a suite of key performance indicators,
which are discussed on page 115. The global pillars
are:
• to exploit HSBC’s global reach by more
effectively joining up the company by country,
distribution channel, customer group and global
business;
• to improve its customer experience so that
customers feel that HSBC is the best place to
bank;
• to invest in developing HSBC’s brand and to
encourage all staff to live HSBC’s brand values
in their day-to-day activities;
• to improve staff engagement by ensuring
employment policies are progressive,
perceptive, responsive, respectful and fair;
• to grow the business by focusing on deposit-
taking and achieving the right balance between
risk and reward;
• to enhance working practices and use
technology more effectively to make it easier for
customers to do business with the Group; and
• to clearly allocate responsibility for delivery of
the above initiatives to country managers and
heads of customer groups and global businesses,
with Group Head Office and regional head
offices providing guidance and, where
appropriate, delegating authority.