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HSBC was born from one small idea – a local bank serving local needs. In March 1865, HSBC opened its doors for business in Hong Kong and today it welcomes customers all over the world. The intervening years have formed the character of HSBC. Its experiences have created its core strengths of resilience, adaptability and capability for innovation. A glance at its history explains why it believes in capital strength, strict cost control and in building long-term relationships with customers. HSBC has weathered change in all forms – revolutions, economic crises, new technologies – and has adapted to survive. Growth has come organically and through strategic acquisitions, and these purchases have brought their own strengths and cultures to the Group. The resulting corporate character of HSBC enables it to meet the challenges of the financial world of today and tomorrow. This brief history introduces the major events, decisions and personalities that have made HSBC what it is today.
Headquartered in London, HSBC Holdings plc is one of the largest banking and financial services organisations in the world. HSBC’s international network comprises around 8,500 offices in 86 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.
Through an international network linked by advanced technology, HSBC provides a comprehensive range of financial services to individuals, businesses and institutions. In total, HSBC serves over 100 million personal and almost three million commercial customers. To meet the needs of these customers, HSBC employs 325, 000 employees speaking over 100 languages. At 31 December 2008, HSBC’s total assets amounted to over US$2,500 billion. Although the Group’s holding company, HSBC Holdings plc, was formed as recently as 1991, many of its principal constituent companies opened for business over a century ago and have long experience in their home and international markets. The story of the growth and development of these companies is rich in variety and achievement, with an international pedigree that is unique in banking history. This brief history describes the origins and evolution of the companies that make up the HSBC Group. The history concludes with a summary of the far-reaching changes in recent years that have given HSBC its special place in today’s major financial markets.
The HSBC brand has also proved its worth in a series of global marketing programmes and sponsorship. Since 2002, the HSBC identity has carried the strapline ‘The World’s Local Bank’ emphasising the Group’s experience and understanding of a great variety of markets and cultures.
2.0 HSBC BANK MALAYSIA BERHAD
2.1 HISTORY IN MALAYSIA
HSBC presence in Malaysia dates back to 1884 when the Hongkong and Shanghai Banking Corporation Limited established its first office in the country on the island of Penang, with privileges to issue currency notes. Thereafter, it opened branches in Ipoh in 1909 followed by branches in Malacca, Johor Bahru and Kuala Lumpur in 1910. The Kota Bharu branch was opened in 1912. In the 1920s and 1930s, the bank opened more branches in several states. The Sungai Petani branch was opened in 1922, the Kuantan branch was opened in 1929, the Muar branch in 1930 and the Kuala Terengganu branch in 1936. In Sabah, the first branch was opened in Kota Kinabalu in 1947. A year later, branches were set up in Sandakan, Tawau and Labuan in 1957. Meanwhile in Sarawak, a branch was opened in Kuching in 1958 while Sibu branch was opened in 1959 followed by second branch in Kuching in 1964.
By 1959, The Hongkong & Shanghai Banking Banking Corporation Limited has embarked on a programme of acquisitions, including the Merchantile Bank and Alliances and has network of 40 branches throughout Malaysia. Through the acquisitions of Merchantile bank, which started operations in Malaysia in 1860, HSBC is indirectly the oldest bank in Malaysia. Currently HSBC Bank Malaysia Berhad has a network of 40 branches nationwide.
In 2006, HSBC was the first foreign bank to be awarded license to operate a Takaful (Islamic Insurance) business in Malaysia. HSBC Amanah Takaful (Malaysia) Sdn Bhd, a joint venture between HSBC Insurance (Asia Pacific) Holdings Limited (49% shareholding), Jerneh Asia Berhad (31 % shareholding) and Employees Provident Fund Board of Malaysia (20% shareholding), commenced operations in August 2006.
HSBC Bank Malaysia was the first locally incorporated foreign bank to be awarded the Islamic banking subsidiary license in Malaysia in 2007. In August 2008, HSBC Amanah Malaysia Berhad , a fully fledged Islamic bank wholly owned by HSBC Bank Malaysia, commenced its operations and now has four branches around the country.
2.2 LOCAL INCORPORATION
Hongkong Bank Malaysia Berhad was incorporated on 1st October 1984. The Malaysian branch operations The Hongkong and Shanghai Banking Corporation Limited were localised and transferred to Hongkong Bank Malaysia Berhad on 1st January 1994, making is the first foreign owned financial institution to be localised. Later, in conjunction with the HSBC Group’s dlobal rebranding excercise, the legal name HSBC Bank Malaysia Berhad was adopted 0n 23rd February 1999.
2.3 HSBC COMPREHENSIVE PRODUCTS AND SERVICES
HSBC Bank Malaysia Berhad’s ability to combine international expertise with in-depth knowledge and experience places them in a unique position to serve customers domestic and international needs. The bank pioneering role reflects its long term commitment toits customers and to Malaysia. Its extensive range of corporate financial products, which include import-export, money markets, treasury and foreign exchange services and personal financial services are unrivalled.
HSBC Amanah Malaysia Berhad and HSBC AmanahTakaful (Malaysia) Sdn Bhd complement the bank by providing a full suite of Islamic financial solutions for both retail and corporate customers.
As an innovative bank, HSBC Bank Malaysia led the Malaysian banking industry into the electronic age with the introduction of the nation’s first online automated teller machine (ATM), and the launch of Electronic Touch Banking and Hexagon – the Groups global PC-based banking financial services platform in the early 1980s.
HSBC new web-based solution platform, HSBCnet boasts of unrivalled security credentials with the introduction of Malaysia’s first security technology, “Virtual Keyboard”. Employing the best-of-breed technologies in HSBCnet, HSBC cuctomers were one of the earliest to enjoy online cheque image enquiry.
Customers of HSBC Bank Malaysia were also the first to benefit from account updates via SMS (Short Messaging Service) alert facility and since September 2000, customers have been able to trade shares listed on Bursa Malaysia online with selected stockbroking companies.
The bank launched a fully-fledged Internet Banking in January 2002, the first foreign-controlled bank to do so. Its website offers an impressive range of services, including fund and telegraph transfers, share applications, bill payments, credit card advances and cheque book and account statement requests. HSBC was also the first bank in Malaysia to offer a dual security log-into Internet Banking via its Security Devices. In June 2003, HSBC Bank Malaysia became the first foreign bank in Malaysia to launch the Europay-MasterCard-Visa (EMV) compliant chip credit card for both its MasterCard and Visa credit cards.
2.4 CORPORATE SUSTAINABILITY
Corporate sustainability has long been a vital element in HSBC Bank Malaysia’s business strategy for long-term success. The bank is strongly committed to its role as a responsible Malaysian corporate citizen through its contribution to the community in which it operates in. Much of its endeavours have been devoted to the promotion of environmental conservation, the advancement of education, the support of philanthropic causes, the preservation of culture and heritage in the country.
In its long-standing efforts to conserve and protect the environmental conservation, the bank notable partners in Malaysia include WWF-Malaysia and Malaysian Nature Society (MNS). HSBC Bank Malaysia also supports programmes that provide underprivileged children with the opportunity to further their education. At the same time, HSBC Bank Malaysia reaches out to the disadvantaged community through the voluntary involvement and assistance from its employees. Its aim is not to provide financial support alone, but also educational and vocational training to this special group.
2.3 AWARDS AND RECOGNITION
HSBC received numerous award in the banking industry. Among the awards received are:
Best Domestic Cash Manager – Euromoney
Best Foreign Cash Manager
Blueprint Award (RAM Award of Distinction 2008) (MRCB Southern Link Berhad Sukuk Transaction) – RAM League Award
Best Islamic Project Finance Deal (Malaysia) (MRCB Southern Link Berhad Sukuk Transaction) – The Asset Triple A Awards for Islamic Finance
Most Innovative Islamic Finance Deal (MRCB Southern Link Berhad Sukuk Transaction) – The Asset Triple A Awards for Islamic Finance
Most Innovative Islamic Finance Deals (Cagamas RM2 billion Sujuk Commodity Murabahah deal) – Asset Triple A Awards for Islamic Finance
Best Subcustodian – The Asset Triple A Transaction Banking Awards
Best Domestic Custodian – The Asset Triple A Transaction Banking Awards
Best Trade Finance Bank – The Asset Triple A Transaction Banking Awards
Best Transaction Bank – The Asset Triple A Transaction Banking Awards
Best project Finance Deal (MRCB Southern Link MYR1.26 billion Senior Sukuk and Junior Sukuk and Term Loan project financing) – The Asset
Best Islamic Deal of the Year (MRCB Southern Link MYR1.044 billion Senior Sukuk and Junior Sukuk project financing) – Finance Asia
Islamic Deal of the Year (MRCB Southern Link MYR1.044 billion Senior Sukuk and Junior Sukuk project financing) – The Credit
New Project Finance Benchmark Deal 2008 (MRCB Southern Link MYR1.044 billion) – RAM League Awards
Groundbreaker Top 10 Deals of 2008 (MRCB Southern Link MYR1.044 billion) – Islamic Finance News
Deals of the Year Award 2008 (State Bank of India MYR500 million Fixed Rate Bonds – HSBC is Sole Lead Manager and Sole Bookrunner) – CFO Asia
Winner in The Banking and Investment Sector for Malaysia’s Top 100 Leading Graduate Employers 2008 – GTI Specialist Publishers
Best Bank In Malaysia – The Asset Country Awards 2008
Best Debt House in Malaysia – The Asset Country Awards 2008
Best Domestic Cash Management Bank in Malaysia – Euromoney
Best Foreign Commercial Bank – Finance Asia Country Awards for Achievement
Best International Trade Bank in Malaysia – Trade Finance
3.0 KEY SUCCESS FACTORS FOR HSBC
SWOT analysis is the key factor contributes to the successful of HSBC Bank Malaysia Berhad. By SWOT analysis we will recognize and analyze HSBC strengths, weaknesses, its market opportunities and threats to the company future.
The key success factors which can be identified as HSBC strengths are:-
3.1 International Finance
Since HSBC is a multinational company itself, it is well-qualified to advise other companies on aspects of international business. With offices around the world, for the cosmopolitan client, HSBC often cannot be beaten in this area. HSBC knows how to succeed in M&A and organic and effective growth. It was mostly Asia bank until it took over a UK bank in 1992 and now has become the world’s second largest bank by profit.
3.2 Shariah financial solutions for Muslim customer
HSBC are able to recognise the various financial requirements of their customers and, as the world’s local bank, HSBC ensure to provide them with a full suite of Shariah-compliant financial solutions to cater to their individual needs. HSBC Amanah Malaysia complements the existing comprehensive banking solutions of HSBC Bank by offering its customers a full range of Islamic retail and corporate products and services.
3.3 Positioning itself in ‘World Local Bank’
Despite growing in almost 80 countries all over the world, HSBC has been successful in positioning itself in ‘World’s local bank’. As the bank constantly works hard to maintain a local feel and local knowledge, customers feel comfortable to bank with an international brand like HSBC. Consequently it has ensured high customer loyalty and HSBC has been able to retain its large customer pool.
3.4 Ability to reach a large section of customers.
Another key factor of success is the ability of HSBC to reach a large section of customers by different innovative promotional campaigns. Moreover discounts, rebates, relaxing of interest rates on loan during crisis etc. has helped to gain popularity as well as confidence among its customers.
3.5 Strong focus on the services offers to the customers.
HSBC also keeps a strong focus on the services that it offers to the customers. It offers personal banking services, consumer finance, commercial banking, corporate investment banking and market, private banking etc among 100 million customers spread all over the world in a very professional and efficient way .This has helped to boost up the confidence level of the customers to a great extent. Also its professional attitude towards understanding the different hitherto untapped segments like niche marketing or targeting a specific demographic segment has led to its success story.
3.5 Strong corporate branding
The corporate brand is the overall umbrella for the corporations’ activities and encapsulates its vision, values, personality, positioning and image among many other dimensions. Think of HSBC, which has successfully implemented a stringent corporate branding strategy. HSBC employs the same common expression throughout the globe with a simple advertising strategy based on the slogan “The world’s local bank”. This creative platform enables the corporation to bridge between many cultural differences, and to portray many faces of the same strategy.
4.0 VULNERABLE FACTORS FOR NIKE
The vulnerable factors which can be identified as HSBC weaknesses are:-
4.1 Strategies adopted
It should closely follow the strategies adopted by its competitors and redesign its strategy accordingly with a proper emphasis on its strength i.e. ‘World’s local bank’. Also it should be careful that the customers do not feel any uncomfort or uneasiness while dealing with the bank personnel. It should also watch out for potential customer and new business segments. Internally, it should ensure that the employees are motivated enough in their job to deliver maximum productivity.
HSBC’s branding emphasises its global presence, and this may be seen negatively by some customers in its implication of homogenisation and lack of personalisation.
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