SWOT analysis of HSBC

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SWOT analysis of HSBC

This is a detailed SWOT analysis of HSBC. It aims to analyse the strengths and the weaknesses of HSBC. It also aims to explore the opportunities and the threats facing the bank. HSBC is one of the largest banking and financial services organisations in the world.

Strengths of HSBC

It goes without saying that the HSBC brand is recognised worldwide. HSBC operates in 66 countries and territories. The four global businesses the bank has are Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. HSBC has more than 39 million customers worldwide (HSBC Group, 2019).

HSBC is one of the leading banks in the world by market capitalisation. Market capitalisation (stock market value) refers to the total value of issued shares of a publicly traded company. As of May 2018, HSBC Holdings is No 6 in the top bank ranking with market capitalization amounting to around 194.07 billion U.S. dollars (Statista, 2019). It is also the 7th largest bank in the world by total assets. As of May 2018, the total asset of HSBC is $2.52 trillion (Martin, 2018).

HSBC is a diversified financial institution. More than 50 per cent of its client revenue comes from businesses and individuals with an international presence. HSBC is listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges. The shares of the company are held by around 200,000 shareholders in 130 countries and territories. HSBC is also one of the largest mortgage lenders in the UK (HSBC Group, 2019).

Weaknesses of HSBC

Fall in share prices and fluctuations in profits have been a problem for HSBC in the last few years. For instance, HSBC had a 62 per cent decline in profits for 2016, dipping to $7.1bn (£5.7bn) from $18.9bn in 2015 (Morrison, 2017). Likewise, its share price dropped significantly in 2018 as well (Stephens, 2018).

A computer glitch delayed 275,000 HSBC payments in August 2015 (BBC, 2015). HSBC also found itself mired in controversy in a number of times in the past years. For instance, it was one of the banks fined in the UK and the USA in 2014 in the Forex Scandal. Likewise, a US Senate committee issued a report stating that the bank was found in breach of money-laundering rules.

Opportunities for HSBC

HSBC can grow further in many of its existing markets. Countries such as China, India, the UK, the United States and some others offer the bank opportunities for further growth. With a total of population of 1.339 billion (as of 2017), India is a fantastic market for personal banking. HSBC has potential to expand further in the British mortgage market as well. Expansion into emerging markets through acquisitions is worth exploring.

Threats to HSBC

Threat is the last element to address in the SWOT analysis of HSBC. The bank faces threats from a number of competitors because of its operations in many countries and territories. The main competitors of HSBC in the Unites States are JPMorgan Chase, Bank of America, Citigroup, Morgan Stanley, and Wells Fargo. The main competitors of HSBC in the UK are Barclays, Santander, Lloyds, Nationwide building society, and the Royal Bank of Scotland.

Recession, financial losses, and credit issues may impact on HSBC’s operations badly. Hacking, data loss, further probes, and controversies could also undermine customers’ confidence in HSBC.

We hope the article ‘SWOT analysis of HSBC’ has been helpful. You may also like reading SWOT analysis of Barclays and SWOT analysis of JPMorgan Chase. Other relevant articles for you are:

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Last update: 12 March 2019

References:

HSBC Group 2019 (2019) Who we are, available at: https://www.hsbc.com/who-we-are (accessed 03 March 2019)

BBC (2015) HSBC glitch payments ‘all processed’, available at: https://www.bbc.co.uk/news/uk-34095626 (accessed 07 March 2019)

Martin, W. (2018) These are the 28 biggest banks in the world — each one with more than $1 trillion of assets, https://www.businessinsider.com/biggest-banks-in-the-world-2018-5?r=US&IR=T (accessed 03 March 2019)

Morrison, C. (2017) HSBC profits plummet: This is how City analysts reacted, available at: http://www.cityam.com/259487/hsbc-reactionshsbc-profits-plummet-analysts-reacted (Accessed 05 March 2019)

Statista (2019) Leading banks worldwide as of May 2018, by market capitalization (in billion U.S. dollars), available: https://www.statista.com/statistics/264905/top-10-banks-by-market-capitalization/ (accessed 03 March 2019)

Photo credit: hsbc.co.uk

Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.