HSBC
Not content with having the second-largest market capitalisation in the world, HSBC took a major (and good value) step forward in its aim of becoming the world’s leading financial services organisation. It bought US consumer finance and cards group Household International at only 1.7 times book value. This acquisition fulfilled a number of goals, including cutting the group’s cost-income ratio, spearheading its moves into other markets and giving it the US exposure it had been looking for.
The purchase also ties in with last year’s acquisition of Bital, Mexico’s fifth-largest bank. Together, they can target the Mexican-US remittances market and the large immigrant Mexican population in the US.
China is a natural market for HSBC, due to the bank’s Shanghai roots, and it built on its 8% stake in Bank of Shanghai by buying a 10% stake in Ping An Insurance, the third largest insurer in the country, with more than 25 million policyholders. This was typical of HSBC – a bold move at a good price, but without too much risk.
HSBC made major improvements to its investment banking business by integrating corporate and investment banking, after moving into the debt and capital markets business, and climbing up the mergers and acquisitions league tables to join the top 10 – competitors in that field are now taking it more seriously.
The bank continues to be well managed. It ensured that the succession of chief executive officer Keith Whitson by Stephen Green was flagged well in advance for minimum disruption. It is also taking advantage of the high-quality recruits brought into the HSBC fold through acquisition to increase the breadth of its management expertise. With another strong financial performance and far-sighted acquisitions, HSBC is deservedly once again Global Bank of the Year.
HSBC Group Chairman Sir John Bond says: “We are delighted to have won this award for the second year running. We hope it reflects the continued progress that HSBC has made during the last 12 months. It is a tribute to my talented and hard-working colleagues. Above all, perhaps, it is recognition of the loyalty and support of almost 100 million customers whom we serve worldwide. We never forget that our success depends on their success.”
