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Company History: The HSBC Group is named after its founding member, The Hongkong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between Europe, India and China. The inspiration behind the founding of the bank was Thomas Sutherland, a Scot who was then working for the Peninsular and Oriental Steam Navigation Company. He realized that there was considerable demand for local banking facilities in Hong Kong and on the China coast and he helped to establish the bank, which opened in Hong Kong in March 1865 and in Shanghai a month later. Soon after its formation the bank opened agencies and branches around the world. Although that network reached as far as Europe and North America, the emphasis was on building up representation in China and the rest of the Asia-Pacific region. HSBC was a pioneer of modern banking practices in a number of countries. In Japan, where a branch was established in 1866, the bank acted as adviser to the government on banking and currency. In 1888, it was the first bank to be established in Thailand, where it printed the countrys first banknotes. From the outset trade finance was a strong feature of the local and international business of the bank, an expertise that has been recognized throughout its history. Bullion, exchange, merchant banking and note issuing also played an important part. By the 1880s, the bank was acting as banker to the Hong Kong government and also participated in the management of British government accounts in China, Japan, Penang and Singapore. In 1874 the bank handled Chinas first public loan and thereafter issued most of Chinas public loans.
WHAT IS HSBC?
WE ARE THE WORLDS LOCAL BANK. Headquarters in London, HSBC is one of the largest banking & financial services organization in the world. HSBCs international network comprises over 9500 offices in 76 countries & territories in Europe, the Asia-Pacific region, the Americas, the Middle East & Africa. With listings on the London, Hongkong, New York, Paris & Bermuda stock exchange shares in HSBC holdings places are held by nearly 200,000 shareholders in some 100 countries & territories. The shares are traded on the New York stock exchange in the form of American Depository Receipts. Through an international network linked by advertisement techniques, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services like1. 2. 3. 4. Personal financial services Commercial Banking Corporate Banking Investment Banking
The HSBC Group commenced operations in India in 1867 with a branch in Calcutta. They claim an earlier commencement, as the Mercantile Bank of India, China & London, which the group acquired in 1959, was established in 1853, with a branch in Bombay. The Bank has relocated some branches in Mumbai, New Delhi, Chennai, Banglore, Kolkata & Visakhapatnam from what were once important trade centres to more appropriate present day locations that hold our target customer base.
YEAR OF COMMENCEMENT OF OPERATIONS IN INDIA The Mercantile Bank of India, China & London : 1853 The Hongkong & Shanghai Banking Corporation Limited (HBAP) : 1867 HSBC Securities & Capital Markets (India) Private Limited (HBAP) : 1995 HSBC Private Equity Management (Mauritius) Limited (India liaison Office) (PEIN) : 1995 HSBC Electronic Data Processing India Private Limited (HDPI) : 2000 HSBC Primary Dealership (India) Private Limited (HCPD) : 2001 HSBC Professional Services (India) Private Limited (HPSI) : 2001 HSBC Software Development (India) Private Limited (HSDI) : 2002 HSBC Asset Management (India) Private Limited (ISIN) : 2002 HSBC Insurance Brokers (India) Private Limited (ININ) : 2003 HSBC Operations & processing enterprise(India) Pvt. Ltd. (HOPE) : 2003 Canara HSBC Oriental bank of commerce Life insurance co. Ltd. : 2008
overseas & onshore. In 2006, an International Banking Centre was established facilitate cross border business referrals. In October 2005, HSBC launched an onshore Private Banking proposition branded HSBC Private Banking. The proposition targets clients with minimum assets of INR 25 M & encompasses asset classes such as Real Estate, Equity Derivatives & Commodities. This is an addition to Fixed Income & Equities, which are already being offered. The proposition uses Active Advisory as its cornerstone & key differentiator. The Bank has sought RBI approval to establish a separate consumer finance branch network under a non banking financial institution, which will distribute personal loans & ancillary products to a broader segment of the Indian consumer base than is currently served by the Banks existing product portfolio. The personal loan product is being piloted through the bank branch network & initial results are promising.
COMMERCIAL BANKING
HSBC is a leading provider of financial services to small, medium-sized and middle-market enterprises. The Group has over 43,000 such customers in India, including sole proprietors, clubs and associations, incorporated businesses and publicly quoted companies. Commercial Banking provides a full range of banking services to these customers including multi-currency business accounts, payment and cash management, trade services, factoring and a range of borrowing solutions. In India, Commercial Banking has a presence in 47 branches covering 26 key cities and for the convenience of our customers, a multi channel service including Internet and Phone banking. For SME customers, HSBC offers the complete range of transaction baking services as well as unsecured loans and loans for and against property. The services are supported by a large Sales and Relationship Management team in key locations across the country. India is the first country in the HSBC Group where Commercial Banking lends to Microfinance Institutions, thus providing indirect funding to hundreds of small business owned and run by members of underprivileged
sections of society. A dedicated unit has been formed to focus on Microfinance and other Priority Sector institutions, with a view to further reach out to the marginalized and under banked.
Factoring
HSBC India offers a comprehensive range of Factoring and Supply Chain Finance Solutions, which include the following products: For Vendors/Suppliers/Purchase Channel of our corporate customers Payables Financing Purchase Order Financing For the Sales Channel of our corporate customers Factoring (With or Without Credit Protection) Export Factoring (With or Without Credit Protection) Portfolio Invoice Discounting (With partial credit protection) Distributor Finance
Payables Financing: HSBC Indias Payable Financing product enables companies to finance their payables to vendors. This helps companies to provide immediate liquidity to vendors against their supplies at competitive rates and will enable the company to negotiate better pricing terms with vendors. It also enables the vendors to improve their cash flow by providing continuous liquidity against their receivables. Our payables financing products can be structured either against Bills of Exchange or Accepted Invoices. Purchase Order Financing: is a facility to suppliers of our Corporate Banking Clients to finance their pre shipment working capital requirements. Pre shipment working capital lines are sanctioned to the suppliers against Purchase Orders issued to the suppler. Factoring: This is a service that covers the financing and collection of account receivables in domestic trade. Receivables are factored, by HSBC with added service of credit protection, collection and sales ledges
administration. Thus the management of the company may concentrate on production and sales and need not concern itself with non-core activities like collection and sales ledger administration. Export Factoring: enables companies to finance their open account export sales at competitive rates either in Rupees or Foreign Currency. Through a network of overseas based correspondent factors, HSBC provides credit protection against buyer default and collection services. Portfolio Invoice Discounting: Essentially covers purchase of receivables with partial credit protection based on a First Loss Deficiency Guarantee. The portfolio should be well spread with acceptable levels of concentration and the debtors must have had a satisfactory track record with the company. A field audit will be conducted to determine portfolio quality based on which a First Loss Deficiency Guarantee percentage will be agreed. Collection remains the responsibility of the Corporate with repayments either on a pre-agreed schedule or based on actual collections.
Distributor Finance: is currently offered to the distribution channel of Large Corporate Banking Clients and can be structured to suit the specific requirements of each corporate and its distribution channel. Through the Distribute Finance Program, HSBC finances companys dealers, which will assist the company in providing steady, assured credit to its distribution chain.
clients local and global needs, ensuring a full understanding of the companys business and financial needs. Based on our clients requirement, HSBC assigns Global Relationship Management teams to provide structured solutions for all its needs. Our Global Relationship Management teams are tasked with understanding in depth the sectors in which our clients operate with the aim of adding value through detailed industry knowledge and structured financial solutions. Focus on overseas acquisition financing, corporate finance and advisory roles, overseas cash management opportunities, cross border funding, project & export finance through concerted marketing with all product providers. The Corporate Bank (CB) in India was top ranked (1st overall) in the 2005 Greenwich Survey with a Greenwich Quality Index (GQI) of 647. Currently CB manages approx. 470 CB relationships with total advances of approx. USD 1.08Bn as at end of Dec05 and total deposits of USD .98Bn. Sectoral account management- Improved industry knowledge andsector4 expertise. The CB portfolio is largely spread within the following sectors divided as under: Corporates Consumer Brands Industrials &Technology Energy and Utilities Telecommunications Automotive Healthcare Transport and Logistics Media Institutional Banks Financial Institutions Securities MutualFunds/AssetManagement Companies Insurance Financial Sponsors Business Process Outsourcing (BPOs) Broker and Dealers
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INVESTMENT BANKING
1. HSBC FIXED DEPOSITS When it comes to assured returns, choosing the right type of savings scheme makes all the difference. HSBC Fixed Deposits let you make the most of value-added benefits as you create wealth at low risk. Features & Benefits The superior Fixed Deposit to invest in, for a secure future You can now open a Fixed Deposit with Rs. 10,000 only Enjoy high rate of returns on your HSBC Fixed Deposits Choose from a wide range of tenors as per your convenience Avail of our special rates for select tenors Interest Rates Fixed Deposit Period Interest Rate Senior Citizens Interest (% p.a.) Rate** (% p.a.) 7 days 3.00 3.25 8 to 14 days 3.00 3.25 15 to 29 days 3.50 3.75 30 to 59 days 4.25 4.50 60 to 89 days 5.25 5.50 90 to 179 days 5.25 5.50 180 to 269 days 5.50 5.75 270 to 12 months 8.00 8.25 366 to 399 days 8.00 8.25 400 days 8.75 9.00 401 to less than 18 months 7.25 7.50 18 months to 730 days 7.50 7.75 731 days 7.50 7.75 732 to less than 36 months 7.50 7.75
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Certificate of Deposit Earn interest for funds invested from 15 days to one year, with HSBCs Certificate of Deposit (CDs). CDs can be availed by individuals (other than minors), corporations, banks, companies, trusts, funds, associations etc. Non-Resident Indians (NRIs) may also subscribe to CDs on a non-repatriable basis only.
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SWOT ANALYSIS
STRENGTHS:1. Brand Name: The biggest strength is the tag of HSBC is going to be the largest group of MNCs. 2. Compatible Price: Prices of different schemes of HSBC are much more compatible than others. 3. Diversified Schemes: We have diversified schemes, which is an exception case of HSBC. 4. Less Risk: Our debt schemes are 100% free form market risk. Even as our portfolio is that diversified so equities are also less risky than others. 5. Easy procedures for account opening too: We have an easy system for opening the account as it includes investment & being named as saving account for the costumer future benefits. 6. Debit cum ATM card facility: The main advantage of HSBCs Debit cum ATM card is that you can access this card through any VISA supported ATMs & withdraw your amount, without any single charge to be paid.
WEAKNESS:1 Prone to Market Risk: Mutual Funds depend on overall macro economic condition and market scenario.
2 Tough Competitions: There is a very tough competition because of large number of Asset Management Companies.
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3 Incapability of Customers: HSBC only provides 2 types of account opening of which one is PVA (Power Vantage Account) under which an aqb of 1 lakh is to be maintained & the second one is Premier Account , under which an aqb of 25 lakh is to be maintained. This is sometimes beyond the reach of a middle class person.
OPPORTUNITIES:1 Hoarding: Most of the Indians have black money that too in huge amount i.e. the do not have money in banks, so approaching them is beneficial, so that through the opening of this account they can make further investment. 2 Indian Capital Market is Growing: So more & more new investors are interested in investments. 3 Tailor Made Products: We have tailor made products like sector specified schemes & even diversified schemes. 4 Branch Expansion: Large no. of branches are opening day by day and even we are traping the countries having almost same type of socio-economic condition & even same culture etc.
THREATS:1 Tough Competition: As there are so many banks having almost same kind of schemes, so its tough to compete with.
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Unawareness: Majority of population is not aware of HSBC brand name and even because of other banking facilities which are much cheaper than HSBCs services, so its hard to convince people. Changing Scenario: Our market scenario is changing day-by-day i.e. our market is fluctuating, so this makes investor hard to invest.
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LIMITATIONS
UNCERTAINITY OF MARKET:HSBCs securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. HIGH COMPETITION:Due to the existence of large number of AMCs & banks the competition is high. Investors are confused that where they have to invest and where not. Other banks also offers the same type of product/schemes which diversified the investors. RIGID AND TRADITIONAL STRUCTURE:The people believe investing in Bank FDs and Post Office saving and are reluctant to invest in Mutual Fund. People like to secure money in terms of lending to the people on high interest they meant their amount is safe, or further to invest in their own business which will give them high return obviously.
SOCIO- ECONOMIC FACTOR:The standard of living is low and people have low saving so investment in HSBCs schemes is low & beyond their capability. The most of the people of this country are agriculture dependent. So, they have less to invest.
POLITICAL FACTOR:Due to volatile govt & their policies regarding investor & investment, the stock market is not integrated which in turn affects the mutual fund industry.
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RECOMMENDATIONS
1. The investors above the age of 50 years must be taken into consideration as they are having great potential regarding investment. 2. HSBC must lay down some sound strategies to trap more customers by giving them more commission in comparison to other investment centers. 3. HSBC must use marketing tools like point of purchase, advertisement through Mass Media like loading Newspapers, Magazines, Television, Exhibition, Fairs, SMS on Mobiles, advertisement on the internet. 4. The organization is lacking on the parameters of motivation. It is recommended that the organization must adopt the concept of motivation. 5. HSBC should organize programs for customer awareness in developing areas and establish a confidence and belief among the customers residing there.
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BIBLIOGRAPHY
BOOKS:
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1. Kotler Philip: Marketing in New Millennium, Millennium Edition Prentince Hall of India, New Delhi. 2. C.R Kothari: Research Methodology; Wishva Publication, New Delhi. 3. M.J Methew : Risk & Insurance Management
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