Question

What did you learn from HSBC’s case when applying concepts and theories from this chapter?( I want more 700 word)

PROFESSOR'S GUIDANCE FOR THIS WEEK'S LE:

You should know that HSBC has always been one of the most controversial banks worldwide. As an example, one can refer to HSBC to pay $101.5 million to settle fraud charges. Such a large global bank is worth a fair amount of investigation before attempting to post.

CASE STUDY HSBC in 2015: Complex Global Operations and Downsizing Originally known as Hong Kong Shanghai Banking Corp., HSBC was founded in Hong Kong and Shanghai in 1865. During the past 150 years, HSBC grew by leaps and bounds and became one of the largest banks in the world. In 2014, HSBC had 6,300 offices in 75 countries and was headquartered in London, U.K. During the same year, HSBC was rated the second largest bank in the world with total assets of $2.68 trillion after Industrial and Commercial Bank of China ($2.95 trillion). Other top banks on the list included Deutsche Bank (Germany), Credit Agricole (France), BNP Paribas (Spain), Mitsubishi UFJ Financial (Japan), Barclays (U.K.), and Chase (U.S.). The pace of change and competition in the global banking industry is always dynamic and fierce. In emerging markets and developed countries, HSBC continued to be a visible brand name and dealt with the industry's traditional retail sector, commercial banking, global banking, and global private banking. In 2014, HSBC's market capitalization stood at $176.44 billion with revenues of $74.59 billion, and it employed 266,000 workers worldwide. No wonder HSBC's operations remained in major parts of the world and its main revenues came from commercial banking, retail banking, wealth management, and private banking During the 2008 global financial crisis. HSBC did lose money but was not bailed out in Europe and Asia and remained a visible business entity in the banking industry. The financial crisis created havoc in the banking industry, which witnessed systematic distress as well as spillover effects. The crisis also affected HSBC, which ended up losing money and custom- ers. Unlike American banks, HSBC's operations were somewhat spared, but growth remained stagnant during this period. The bank closed its money-losing operations and sold a few assets. This was a major disruption in HSBC's s history and weakened the bank's well-established ness model. To deal with the 2008 financial crisis, HSBC embarked on a major reorganization that changed its strategy, corporate structure, and growth patterns. In 2011, HSBC trimmed its North American operations because of losses in the area of subprime lending.* At the same time, SBC started expanding in emerging markets of Asia. China was selected to be the bank's ma- jor market for future growth. Other reorganization took place that aimed at mostly downsizing and trimming operations. In February 2012, HSBC announced its financial results and said the bank had increased s net by 27 percent. This was clearly the result of HSBC's 2010 restructuring plan, which was in the post-financial crisis period. Whereas HSBC trimmed its operations in North America, the bank's k's Asian markets witnessed a good increase in revenues because of growth in emerging markets.' Financial Times called HSBC "the world's Asian bank." No wonder HSBC planned a major expansion in China and announced increasing its share in hina's Bank of Communications. HSBC also expanded its branches in China from 110 locations to 800. This was a major part of the bank's reorganization that was initiated by HSBC's CEO Stuart Gulliver and his team from 2009 to 2010. Although competition was heightened because of the arrival of local and multinational banks. mar markets were available to financial institutions that carried efficient business models and networks. Because of its long history and operations, the bank's restructuring initiatives resulted in tangible growth and expansion. In a special research report ("The World in 2050: Quantifying the Shift in the Global Economy"), Karen Ward, HSBC's chief economist observed: Nineteen) of the 30 largest economies will be emerging economies, the emerging economies 1 ----...LL-L---- I.L. I. ------ 30 (331 / 501) 00 2

Answer 1

Answer:

From this case study following things come to known:

- The HSBC has financially severely affected by world economic recession in 2008, because of its non-systematic way of operations

- After the financial crisis the HSBC has took four wonderful decisions to recover itself:

o Sold out few assets to generate some fund for basic necessities

o Closed its non-profit generating branches at north America and opened new branches in Asia for earning more profit

o Refined its business strategies

o Adopted the trending banking services for its business competitive

- Since the HSBC is an old organisation, so its business model was not effective and stream lined in nature. This bank able to opened many branches in all over the world because of its large size investment capability, but its organisation structure was completely non-systematic in nature. Just after economic recession, its equity has come down and this organisation was not able to compete with American banks. So HSBC closed its branches in North America.

- After recession this bank opened its new branches in Asia and made its organisation smooth and systematic. Also the organisation acquired some modern banking services like: online banking, accessibility of its large scale and real time data, useful analytics and other technologies.

- To be competitive in market an organisation must have following qualities:

o Following systematic and smooth business model

o Make the business model flexible in nature

o Update the organisation technologically in a regular interval of time

o Searching for new scope and opportunities

o Be awaking towards its own weaknesses and threats