HSBC in two minutes

Summary

HSBC, Europe's largest bank by market cap, serves three main segments: wealth and personal banking, commercial banking, and global banking and markets. While active globally, over a quarter of its revenue comes from Hong Kong, where it was founded in 1865. Net interest income constitutes 55% of its total income, with a cost-to-income ratio of 68% in 2020. The bank has significant exposure to carbon-intensive industries, representing almost 20% of its wholesale loans. HSBC aims to provide $750 billion to $1 trillion in sustainable finance by 2030, reflecting its commitment to climate change mitigation.

Takeaways

• 🏦 HSBC is Europe's largest bank by market cap, offering services in wealth and personal banking, commercial banking, and global banking and markets.
• 🌏 Over 25% of HSBC's revenue and most profits are generated in Hong Kong, where the bank was founded in 1865.
• 🇬🇧 The United Kingdom is HSBC's second largest market after Hong Kong.
• 💰 Net interest income accounts for approximately 55% of HSBC's total income, slightly lower than the average for European banks.
• 📊 The bank's remaining income primarily comes from fees and gains on financial instruments.
• 📉 HSBC had a cost-to-income ratio of 68% in 2020, indicating efficiency on par with the average European bank.
• 📉 The Covid-19 pandemic led to a low return on equity for HSBC, similar to many banks during this period.
• 🌱 Loans to six carbon-intensive industries constitute nearly 20% of HSBC's total wholesale loans, with a $130 billion exposure.
• 💚 In 2020, HSBC set a goal to provide between $750 billion and $1 trillion in sustainable finance and investment by 2030.
• 🌐 For more information on banking and sustainability, visit finrestra.com for expert consulting services.

Q & A

What are the main segments of services provided by HSBC?

HSBC provides financial services in three main segments: Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets.

Where does HSBC generate most of its revenue and profit?

More than a quarter of HSBC's revenue and most of its profit are generated in Hong Kong.

When was HSBC founded and what was its original name?

HSBC was founded in 1865 as the Hongkong and Shanghai Banking Corporation.

What is HSBC's second largest market after Hong Kong?

The United Kingdom is HSBC's second largest market.

What percentage of HSBC's total income comes from net interest income?

Net interest income accounts for about 55% of HSBC's total income.

How does HSBC's cost-to-income ratio compare to the average European bank?

HSBC had a cost-to-income ratio of 68% in 2020, which is similar to the average European bank's efficiency.

What impact did the Covid-19 pandemic have on HSBC's return on equity?

Like most banks, HSBC's return on equity was low due to the Covid-19 pandemic.

How does HSBC contribute to climate change?

HSBC contributes to climate change through loans to six carbon-intensive industries, which make up almost 20% of its total wholesale loans.

What is HSBC's financial exposure to carbon-intensive industries?

HSBC has a 130 billion US dollar exposure to six carbon-intensive industries.

What sustainability target did HSBC set for itself in 2020?

In 2020, HSBC set a target to provide between 750 billion and 1 trillion dollars in sustainable finance and investment by 2030.