Report-HSBC | Commercial & Internal Analysis
Added on 2020-01-28
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ACCOUNTINGPROJECT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................31 COMMERCIAL ANALYSIS.......................................................................................................3Corporate History Of the Bank...................................................................................................3Business Model Of the Bank.......................................................................................................4Industry & Environmental Analysis............................................................................................52 LITERATURE REVIEW.............................................................................................................73 REPORT TO MANAGEMENT.................................................................................................10(a) Identification Of Issues faced by the bank..........................................................................10b) Evaluating the accountability of the banking operations of HSBC.......................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................142
INTRODUCTIONThe role of accounting has increased in the current market scenario where complexitiesof the business raises its overall scope. HSBC has been selected in the project report in order todefine its internal efficiency in relation to the external market goals and the objectives. Thereport is presented to highlight the commercial analysis of HSBC PLC that is having itsheadquartering in London (UK). HSBC Plc is providing banking services on a large scaleglobally. It is the sixth largest public company as per the data published by Forbes magazinewith the net worth of $2.67 trillion (US $). This project report is all about emphasis on thecommercial and internal analysis of the overall company. The business model will stress on theexternal environment which is discussed in the overall report along with the analytic models. Thedetailed analysis of various services provided by bank is being analyzed and presented in thisreport.1. COMMERCIAL ANALYSISCorporate history of the bankThe existence of this entity is due to the achievement of financial objectives to enhancethe growth of trade between Europe and China. The name of HSBC bank is named by thefounder. It is being named after its founding member, presently, HSBC is the largest financialand banking service provider globally. It is listed on the London, Honk Kong, Bermuda stockexchange. The shareholding of bank is being divided into 200000 shareholders spread in morethan 100 countries (Abor, 2017). The international network of the bank comprises 9500 officesin 86 countries providing a wide range of financial services ranging from personal level tocorporate level customers. HSBC started its operations in a British colony of HONK KONG in the year 1865 & wasformally incorporated as ''The Hong Kong & Shanghai Banking Corporation'' by an ordinance oflegislative council of Hong Kong on 14th August 1866. After this, the HSBC bank was legallyregistered and started providing banking services (Mouraviev and Kakabadse, 2017). Gradually,the bank expanded its services in its home country by the acquisition of Midland Bank inLondon. Later, company relocated its headquarters from Hong Kong to London. After that, itstarted acquiring the banks in other countries as well. For instance: HSBC acquired Banco3
Bamerindus bank of Brazil in the year 1997 for 1GBP billion Similarly, many such acquisitionstook place in the other financial markets of North America & South America, Europe, Africa,Asia and Australia. At present, company has been carrying out its operations in more than 80countries and having a huge customer base of 60 million customers and a market valuation of £161.12 billion (approx)Business model of the bankThe four major areas of services provided by bank are in the fields of CommercialBanking, Retail Banking & Wealth Management as well as Global Banking and Marketsincluding Investment Banking and Global Private Banking (Mouraviev and Kakabadse, 2017).HSBC divides its activity into the following segments which are the Home system, PriorityGrowth markets, Network industry, and Small Marketplace. The home markets of company areUK & Honk Kong.. The bank has listed 19 countries by prioritizing the markets on the basis ofeconomic growth. . These 21 countries together account for 90% profits earned by the bank andso, they remain at primary focus of capital deployment. Network markets consist of thosemarkets that are of strong international relevance serving mainly to complement the internationalpresence and operating mainly through global and commercial banking markets. Thecombination of priority growth, home and network markets covers approximately 85% offinancial flows and international trade. Last categories constitute of small markets wherebanking operations are operating on a small scale in order to operate profitably or those marketswhere the representative offices are maintained. All legal entities are being regulated by the localregulators and the overall group is being regulated in UK by Prudential Regulation Authority(PRA) for handling prudential matters and Financial Conduct Authority (FCA) for the matters inrelation to customers, market and protection. The division of markets by bank has been explainedwith the help of following table: 4
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