HSBC equity, debt and subsidiaries

Accuracy score :
97%

Summary (from the latest annual and quarterly report)

  • Total equity : 197 billion USD
  • Market Cap is 154.4 billion USD ( the last price of the stock is 37.94 USD)
  • HSBC Holdings plc provides banking and financial products and services. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments
  • Total stockholders' equity has increased from 194 billion USD in 2018 to 197 billion in 2019
  • The company has 151 billion USD in cash on account
  • Total equity – cash on account = 197 billion USD – 151 billion USD = 46 billion USD
  • In 2019 the company had 200 billion USD long-term debt, short – term debt was 50 billion USD
  • The company's revenue has increased in 2018 to 52 billion USD from 49 billion in 2017
  • Net income in 2018 was 13 billion USD, Net income in 2017 was 10 billion USD
  • In 2019 HBSC has paid 10 billion USD dividend to its shareholders

 

Opinion about the company

Fundamentally it is a good company and in the future, we can expect its growth (Total debt is 250 billion USD, big amount of cash on company's account, ROE is around 6 %).

Established in 1865 in Hong Kong, London-based HSBC is one of the largest banks in the world with 40 million customers worldwide. It operates across 3,800 offices in 66 countries globally. Key regions include Asia, Europe, the Middle East and North Africa, and North America. The two largest markets for the bank are the United Kingdom and Hong Kong. HSBC customers range from individual savers and investors to some of the world’s biggest companies, governments and international organisations. HSBC aims to connect them to opportunities and help them to achieve their ambitions. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments.

  • The Retail Banking and Wealth Management segment offers personal banking products and services, mortgages and loans, credit cards, insurance and investment products, savings products, international services, and wealth solutions and financial planning services, as well as telephone, Internet, and mobile banking services
  • The Commercial Banking segment provides services and financing for buyers and suppliers in the trade cycle; liquidity and cash management services; capital financing, including debt, equity, and advisory services; and insurance and investment products, such as business and financial protection, trade insurance, employee benefits, corporate wealth management, and other commercial risk insurance products to small enterprises, mid-market companies, and multinationals
  • The Global Banking and Markets segment is involved in the provision of advisory, financing, prime, research and analysis, securities, trading and sales, and transaction banking services to corporates, financial institutions, and resources and energy groups
  • The Global Private Banking segment provides private banking, and investment and wealth management services to business owners, entrepreneurs, and senior executives and their families

When we talk about the history of HSBC it is important to mention that HSBC acquired the UK’s Midland Bank in 1992. In 1998, the bank decided to adopt a unified brand worldwide, using HSBC and its red-and-white hexagon logo everywhere it operated. The hexagon symbol was derived from the bank’s original house flag, which in turn was based on Scotland’s flag. In China, however, it has grown: both organically, following the establishment of HSBC Bank China in 2007, and through a series of alliances with Chinese financial institutions. The bank opened its new Shanghai headquarters in the city’s Pudong district in 2010, the same year it opened its 100th office in the country. And in 2017, HSBC Qianhai Securities Limited began operating – the first joint venture securities company in mainland China to be majority-owned by a foreign bank. In July 2018, the bank separated its UK retail banking business and most of its commercial banking business into a new entity called HSBC UK. The move was in response to the UK’s Financial Services (Banking Reform) Act 2013 which required that all banks ‘ring-fence’ their core banking services in the UK. The ring-fenced business opened its new environmentally friendly headquarters in Birmingham in November 2018.

Standalone subsidiaries and acquisitions:

  • HSBC acquired the UK’s Midland Bank in 1992 for around 7 billion USD
  • In 2020 HSBC acquired Crédit Commercial de France, a large French bank for around 9 billion USD
  • In August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third-largest retail bank for 1.1 billion USD
  • In November 2002, HSBC expanded further in the United States. Under the chairmanship of John Bond, it spent 15 billion USD to acquire Household Finance Corporation (HFC), a US credit card issuer and subprime lender
  • HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for around 1 billion USD in December 2004
  • In 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai
  • Acquisitions in 2005 included Metris Inc, a US credit card issuer for 1.6 billion USD in August and 70.1% of Dar es Salaam Investment Bank of Iraq in October
  • In April 2006, HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for 155 million USD
  • Other investments and acquisitions are worth 1 -2 billion USD

 

Total = 36 billion USD

  • On 11 December 2012, HSBC agreed to pay a record $1.92 billion fine in this money laundering case
  • In June 2014, an indirect wholly-owned subsidiary HSBC Life (UK) Limited agreed to sell its £4.2 billion UK pensions business to Swiss Re
  • HSBC announced in August 2015 that it would be selling its Brazilian unit to Banco Bradesco for $5.2 billion following years of disappointing performance
  • In May 2016, HSBC announced that it would shut 24 of its 50 branches in India over the following several months, reducing its presence in the country to fourteen cities
  • HSBC plans to move roughly one-fifth of its London-based investment bankers to its Paris offices in order to maintain a continuous access point to the European Union's single market. While its headquarters will remain in London, the staff movement is expected to avoid a loss of $1 billion of revenue after Brexit

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