The History of HSBC by Todd Holliday

Thomas Sutherland founded HSBC, The Hong Kong and Shanghai Banking Company, in 1865. HSBC is one of the oldest banking groups in the modern world. The Hong Kong Shanghai Banking Corporation was started by Sutherland at the end of the Opium Wars to facilitate trade between China and Europe. HSBC opened its first office (Hong Kong’s Wardley House) in March of 1865 and the second office, the Shanghai branch, was opened the following month. The following year, after being granted a charter to operate by the British Treasury, HSBC opened a third branch, located in Japan.

HSBC rapidly expanded its holdings and influence in Asia over the next 70 years. Some of its more noteworthy accomplishments during this time include being in 1874, the first bank to lend money to individuals and businesses in China. HSBC held the British colonial government accounts for all Asian colonies, from the 1880s onward. HSBC’s establishment of the first bank in the Kingdom of Thailand, where it initially printed the country’s money as well as held its deposits, in 1888, was one of the banks first forays into diversification. This period of rapid expansion included new branch offices in Bangkok, Manila, Shanghai, and a new office building in Hong Kong.

Prior to the Japanese invasion of Hong Kong in 1941, HSBC moved its head office to London only returning to Hong Kong after WWII ended. The head office returned to its headquarters in 1946. In the more stable years following WWII the Hong Kong Shanghai Bank began a worldwide campaign of expansion and diversification. During the post-war years, it established the Hong Kong and Shanghai Banking Corporation of California, the Hong Kong Banks of Australia and Canada, HSBC acquired The British Bank of the Middle East, the India based Mercantile Bank, purchased a controlling interest in the Hang Seng Bank of Hong Kong, acquired a 51%, and ultimately 100%, of the Marine Midland Bank of the United States of America, and 14.9% stake of the Midland Bank of the United Kingdom. . HSBC formed a merchant banking arm, Wardley Limited, in 1972.

In 1991,the Hong Kong and Shanghai Banking Corporation formed HSBC holdings plc to act as umbrella company for the gigantic group of companies. HSBC Holdings plc is incorporated in England and headquartered in London. According to Forbes magazine, HSBC Holdings plc is the world’s largest banking group and the world’s largest company. HSBC is one of the only banks not requiring or accepting any monetary infusion or bailout funds from any government.

HSBC Holdings plc i is listed as a component of the Financial Times Stock Exchange Index 100 and the Hang Sing Index. The company’s stock is traded on the world’s largest stock markets. HSBC is known for its stability on the global market. Its conservative and risk avoidance business operation is legendary. HSBC Holdings continued HSBC’s pattern of expansion and diversification throughout the 1990s. Most notably the bank expanded into the South American markets by acquiring Brazil’s Banco Bamerindus, and Argentina’s Roberts SA de Inversiones. And HSBC made its largest acquisition to date in the United States by acquiring Republic National Bank of New York.

The 21st Century witnessed HSBC Holdings emergence as the largest bank in Europe and a strengthening of the HSBC Holding in America, Mexico, and the Caribbean. They acquired Credit Commercial de France, Turkey’s Demirbank, and Poland’s Polski Kredyt Bank SA. HSBC Holdings operates under a series of principles and values. The company’s principle statement, per their website, is, “through loyal and committed employees who make lasting customer relationships and international teamwork easier to achieve” they are able to offer their customers an outstanding set of core values. The values include outstanding customer service, effective and efficient operations, strong capital liquidity, a conservative lending policy, and strict expense discipline.