History of HSBC
HSBC ( Hongkong Shangahai and Banking corporation) is among the largest banks in the world. It came into being in the year 1865 to enhance the growing trade between India, China and Europe. The idea of forming the bank came from the mind of Thomas Sutherland who had envisioned the growing demand of banking facilities in Chinese market and consequently the bank was opened in 1865 in Honkong and Shangahai. Very soon the bank had opened up branches around the world. The bank had opened up its branches in Europe,North America but the importance was given more to China. HSBC was a pioneer in many aspects as far as banking is concerned.In Thailand it was the country’s first bank to print currency notes. One of the most prominent feature of HSBC was trade finance. At the same time merchant banking also played an important part. By the end of eighteenth hundred century HSBC was the banker to the Hongkong government and had also handled public loans in China. About HSBC
It is known as world’s local bank.
It has its headquarters in London
It has around more than nine thousand offices in different countries ranging from Europe to South East Asia. It has been listed among the largest stock exchanges in the world comprising of London Stock exchange, NYSE, Hong kong stock exchange as well as Paris and Bermuda stock exchanges. The shares of the company are traded in 100 countries among more than two hundred thousand people. Following is the list of financial services provided by the bank – 1. Commercial Banking
2. Corporate and institutional Banking
3. Investment Banking
Commercial Banking – HSBC is one of the leaders in providing banking services to small and mid-cap enterprises. The company has over 40,000 customers in India. Commercial banking provides a range of services which consisting of trade services, business accounts and cash management to customers. Commercial Banking in India is present in around 50 branches across 25 different cities. Apart from this the Internet and phone banking services are also being provided for the convenience of our customers.HSBC has got a different transaction banking services for SME customers. These services are supported by Relationship Managers across the country.The commercial banking division of the HBC group lends to Microfinance institutions in our country which is a indirect way of providing funds to small businesses owned by downtrodden sections of the society. A separate team has been formed to look after Microfinance institutions to look after the under-privileged section.
Payables Financing – This product of HSBC enables companies to pay their vendors. This helps companies to provide cash to vendors for the supplies which they have been provided.It also helps the vendors to enhance their cash flow by providing liquidity to their receivables. Purchase Order Financing – It is a distinct facility which is being provided to suppliers of corporate banking clientswhich looks after the financing of their pre-shipment working capital requirements. Factoring – This facility looks after the financing of accounts receivables. This facilty helps the management to look after the core activities and subsequently relieves it from noncore activities. Export Factoring – It basically helps companies to finance their open account export sales at competitive prices in both the currencies (Foreign as well as Indian). Portfolio Invoice Discounting – It covers receivables purchased with credit protection based on First loss deficiency guarantee.
The portfolio should be diversified with acceptable concentration level and the debtors should have a decent track record. Distributor Finance- It is offered to the distribution channels of large corporate clients and can be customized to meet the requirement of each corporate and its distribution channel.Through this program HSBC finances the dealers of the company and they in return provide steady assured credit. Payments and Cash Management Domestic as well as zonal cash management solutions are provided to corporate customers in India.The suite includes comprehensive Receivables management solutions with the target to integrate customers back end systems and processes .HSBC also provides capital market solutions to its customers. Trade (International and Domestic) service
HSBC offers a large number of international and domestic trade products.In India it offers trade processing capabilities among banks.Each of the trade procession centre is ISO-9001-2000 certified.The clients in India include large Indian companies as well as its foreign counterparts.It also includes a few mid-sized and small companies.
Corporate And Institutional Banking – Corporate banking offers full range of services to big MNCs, big domestic and a few institutional clients.The services includes access to commercial banking products, working capital facilities, channel financing and also domestic as well as international collections and payments. Institutional banking brings together the company in close ties with the banks and other financial institutions, security houses and insurance companies in India. Clients are looked after by various client service teams who are distributed on the basis of sectors.They consistes of Relationship Managers and industry specialists to develop customized financial solutions.They form the relationship team along with the Investment Banking division. Each of the assigned eams cater to clients local as well as the global needs which ensures a full understanding of the company’s business as well as the financial needs. On the basis of the clients needs HSBC assigns Global relationship management team to provide customized solution to all its needs.
1. HSBC Fixed deposits – This helps to make wealth at low risks.
Features and Benefits –
i) The customer can open fixed deposit with Rs 10000.
ii) The customer enjoys high rate of return.
iii) A certificate of deposit is issued for a period of not less than 15 days and not more than 1 year from the date of deposit.
2. Mutual Funds – This investment basically uses a pool of investors money which is being used by the fund manager to invest in different securities.
Personal Financial Services –
It offers a wide range of competitively priced services and products to over a million Indian residents customers in India as well as around the world.HSBC’S long time existence in India helped t to enjoy the deep knowledge of zonal markets and their traditions.The bank offers a complete range of products including HSBC Premier International,Savings and current account,credit cards and debit cards, term deposits etc The mid-market and the premium customers have access to financial planning and HSBC leads the market in Wealth Management services.The NRI category consistes of 58%of Bank’s deposit base . PEST Analysis of HSBC
Political Aspects – HSBC has been protected by the regulations and the policies of different governments across countries.The company has been able to comply with the business policies made by the respective government according to the suitability of each country so that the company operates its business successfully.The company also has its own protection measures to protect its business interests in countries in case the government imposes sanctions against the policies and practices followed by the company. Economic Aspect – The company has a stable and successful economic stability.
The management of the HSBC sees that it would be successful in seeing off the company through its economic hurdles in case there is a financial depression the market and the company finds it difficult to sustain economically. Social Aspect – HSBC has been hugely affected by the society in which it is operating.The management follows the philosophy that all the stratas of the society is being given equal chance to share the resources given by the company. Technological Aspect – The emergence of IT and IT Enabled services affects the operations of the bank to a large extent. The company uses IT services which are customized according to the requirement of customers across different geographical places.
The market being choosen is India’s metropolitan cities, state capitals as well as urban towns.The people we are targeting are those whose annual income is more than 3 lakhs/annum.It may include the service holders as well as the business class people.It includes people across all age groups who are earning.Pension holders i.e the retired people whose income is above 3 lakhs/annum also come under this bracket. Product – The aim of the product is to offer more value to the customers than their competitors.Keeping this in view the following features are being added in HSBC’s products. Unique Features –
1) Prepaid Cards – An amount of money from your Bank account can be transferred to your prepaid card so that the customer can make use of it while shopping and doesnot need to carry any cash.This will also prevent overspending. 2) Realtime Balance alerts – This facility will send balance alerts to customers mobile device every time the user uses his prepaid card. It will help the customer to keep track of their prepaid card balance at every moment 3) Online Banking – The customers financial resources can be managed online regarding at the beginning of every month how much balance can be put in the prepaid cards.This helps the customer to make use of prepaid card facility while they are at work and using the internet and they thy don’t need to run to the bank to refill their prepaid card balances while at office. Price – Banks shouldn’t charge any fees to open any new current account.The advantage of prepaid scheme is that it allows customers to save.
Place- Delivery channels for new products to customers can be both physical and electronic.The new current account package can be made available to customers through around 1400 HSBC branch networks and also through the internet. Promotion- Initially the promotion can be done through newspapers, magazines and outdoor advertising and internet.A sales promotion can be carried for initial one month to help customer purchase. Later advertising can be done through ,press-releases and brochures