History of HSBC from 1865-2024 Connecting Customers to Opportunities for 160 Years

Since it was first formed as a local Hong Kong bank in 1865, HSBC has evolved into a global banking giant. For business owners, marketers, and people intending to learn from successful business stories, the history of HSBC provides insights into creating opportunities and meeting consumers’ financial needs.

At Business2Community, we’ve consulted a wide range of sources to deliver a comprehensive account of HSBC’s history from a local Hong Kong bank to a key player in the global banking and financial services sector.

Who Owns HSBC?

HSBC (Hong Kong and Shanghai Banking Corporation) is a publicly traded company owned by various shareholders. The largest shareholders include Ping An Asset Management Co. Ltd and the Vanguard Group, Inc. who own 8.826% and 3.729% of the company, respectively.

Thomas Sutherland founded HSBC Limited in 1865. With the backing of 14 of the largest firms in Hong Kong, Sutherland raised HK$5 million in founding capital and the bank opened its doors in Hong Kong on 3 March 1865 and in Shanghai a month later.

Who is the HSBC CEO?

The CEO of HSBC is Noel Quinn. Appointed in 2020, Quinn is a chartered accountant who has held several positions at HSBC since he joined the company in 1987.

During his time at HSBC, Quinn has directed the bank’s transformation strategy and improved its operations. He also guided the bank through the pandemic and ongoing global tensions to reach record profits. In April 2024, Quinn unexpectedly resigned, assuring the Group and investors that he would remain until a new CEO was found and appointed.

Growth and Development of HSBC

HSBC is one of the largest banking and financial services organizations in the world, serving 42 million customers through three global segments:

• Wealth and personal banking
• Commercial banking
• Global banking and markets

Below, we track over 160 years of HSBC history.

1865-1914: HSBC Dominates International Trade

Seeing the need for a bank to support the rising trade between China, India, the rest of the British Empire, and Europe, the Hong Kong and Shanghai Banking Corporation Limited (HSBC) was established in 1865. The bank launched 3 branches in its first year and quickly gained a reputation for strength. By 1875, HSBC had opened branches in seven countries in Asia, Europe, and North America.

As a key player in international trade, the bank was credited with financing a variety of exports including tea and silk from China, cotton and jute from India, and sugar from the Philippines. By 1900, the bank had expanded to 16 countries including:

• Japan in 1866
• India in 1867
• The Philippines in 1875
• Singapore in 1877

It had also grown its government finance business, issuing loans to finance modernization and infrastructure projects such as railway building.

1915-1959: HSBC Weathers the Wars

The war years and the economic conditions during the first half of the 20th century created challenging times for HSBC. Instead of expansion, the bank focused solely on survival throughout the 1920s and 30s. Stringent cost-cutting measures were applied and shareholder dividends were reduced. Despite this, the bank strengthened its foothold in Asian markets.

In December 1941, HSBC was forced to shut down most of its network in Asia and move its head office to London. Employees displayed remarkable courage, remaining at their posts until the last minute to assist customers in accessing cash or transferring funds abroad.

Throughout World War II, only the London, Indian, and US branches remained in full operation. The bank survived due to its significant reserves and forward planning.

At the end of the war, HSBC moved its head office back to Hong Kong and played a crucial role in rebuilding the local economy. Following the establishment of The People’s Republic of China in the 1950s, the bank had to shut down most of its China network.

With only its Shanghai branch remaining, HSBC set out to diversify its business and expand its operations beyond China. This included strategic moves such as establishing the Hong Kong and Shanghai Banking Corporation of California as a subsidiary in 1955. This strengthened the bank’s presence in the US, where it had conducted business in San Francisco since 1865 and New York City since 1880.

1960-1989: HSBC Ventures Into Investments

At the start of the 1960s, the bank pursued profitable growth through acquisitions and organic development. Key acquisitions included the Mercantile Bank and The British Bank of the Middle East.

By its 100-year anniversary, the bank had a global network of 170 offices. Meanwhile, in Hong Kong, the bank doubled down on retail banking and industrial finance.

The arrival of its first computer, the IBM 360 at its head office in Hong Kong in 1967, revolutionized banking across its Hong Kong branches. This allowed the bank to computerize customer accounts, and for the first time, customers could conveniently open accounts and do their banking at any HSBC branch in Hong Kong.

In 1972, the bank founded Wardley, its own investment banking subsidiary to rival competitors and tap into the booming stock market. By the turn of the 1980s, the bank had formed subsidiaries in Australia, New Zealand, Canada, and the US.

In the late 1970s, when China started to open up to foreign investment, the bank focused on rebuilding its presence in China. In 1984, this was cemented when HSBC became the first foreign bank to be granted a banking license on the mainland. Two years later, the bank inaugurated its new headquarters in Hong Kong.

By 1987, HSBC had taken full ownership of the American Marine Midland Bank, strengthening its position as a global bank.

1990-1999: HSBC Relocates to London

Following successful ventures in the Middle East, India, and the US, HSBC acquired the Midland Bank in the UK in 1992. To comply with the terms of the deal, HSBC established HSBC Holdings plc in London as its parent company and relocated its world headquarters from Hong Kong to London.

HSBC ventured into Latin America in 1997, acquiring Banco Bamerindus of Brazil and Roberts SA de Inversiones of Argentina. The following year, the bank announced it would be adopting a unified brand worldwide.

While the Asian 1997 financial crisis continued and 40% of the bank’s key markets were in recession, HSBC launched its “Managing for Value” strategy in November 1998. The strategy’s main aim was to beat the mean total shareholder return (TSR) performance of a peer group of financial institutions, double shareholder returns in five years, and balance group earnings between the OECD and high-growth markets.

By the end of the decade, the bank’s international network had grown to more than 5,000 offices in 80 countries and territories in the Asia-Pacific region, Europe, the Americas, the Middle East, and Africa.

2000-2004: HSBC Makes Strategic Acquisitions

HSBC continued its expansion into Europe with its acquisition of the major French bank Crédit Commercial de France (now HSBC Continental Europe) in 2000. Investing over $2 billion in technology, HSBC was one of the first banks to provide customers with services via the internet on a multi-product, multi-geography basis.

In 2002, HSBC USA launched the HSBC Private Client Services Group to cater to the wealth and tax advisory needs of high-net-worth individuals.

That same year, the bank made a strategic move into Latin America through the acquisition of Grupo Financiero Bital, SA de CV (now “HSBC Mexico”), Mexico’s fifth-largest retail bank, for $1.1 billion. The construction of the bank’s new global headquarters in Canary Wharf was also completed. The 42-storey tower designed by Lord Norman Foster – the same architect behind the HSBC building in Hong Kong – featured HSBC’s two famous lions outside its main entrance.

HSBC continued to build in areas where it has significant strengths and, in 2002, made opportunistic investments in France, Turkey, and Malaysia. Following the   acquisition of Household Finance Corporation (HFC), a US mortgages, loan, and credit card company, in November 2002, the company rebranded to HSBC Finance and became the second largest subprime lender in the US.

Between 2001 and 2003, HSBC reported that its revenue had grown by 9.8% while costs had increased by 8.4%. With a market cap of $190 million by 2004, HSBC was one of the largest banking and financial services organizations in the world.

2005-2009: HSBC Looks to Emerging Markets

Between 2005 and 2007, the bank shifted its focus to organic growth, particularly in emerging markets. Remaining profitable, even throughout the financial crisis, HSBC soon earned its reputation as the “world’s best-run bank”.

However, that reputation came into question in 2006, after its acquisition of Household Finance turned sour. This resulted in eventual losses of $15.5 billion across the bank’s North America operations in 2008 and included a $10.6 billion impairment charge for Household’s consumer finance operation.

Six years after the deal, HSBC was forced to write off its investment. HSBC announced the shutdown of its HSBC Finance arm in the US, leading to nearly 6,000 job losses in March 2009.

Despite these financial woes, HSBC expanded successfully, providing a range of financial services to over 100 million customers in 2009 from 25 million in 1998.

2010-2014: HSBC Tightens Its Security Measures

Throughout the early 2010s, HSBC was embroiled in several damaging controversies. In 2012, A US Senate committee report revealed that Mexican and Colombian drug cartels had exploited HSBC’s lax controls and laundered at least $881 million.

Laundering money in South America and Iranian sanctions-busting resulted in a hefty fine of $1.9 billion in 2013 and a five-year deferred prosecution agreement with the US Department of Justice. In 2014, HSBC agreed to pay $550 million to settle US government allegations that it mis-sold mortgage-backed securities in the run-up to the 2008 financial crisis.

That year, the bank was also rocked by the Swiss Leaks controversy. The data, stolen by Hervé Falciani in 2007/8, exposed HSBC’s Swiss branch for helping wealthy individuals hide $100 billion in secret bank accounts out of the reach of global tax authorities. The bank ended paying a fine of $192 million.

In response to these and similar events across its operations, the bank completely overhauled its private banking business and implemented enhanced transparency measures.

2015-2019: HSBC Asia Focus Pays Off

To celebrate its 150-year anniversary, HSBC committed $150 million in additional funding to global community projects over three years. As part of its strategy to direct capital towards key markets in Asia, the bank also finalized the disposal of its Brazilian operations. Overall, while the global economy experienced significant shifts in 2015, including a sharp decline in commodity and oil prices, HSBC’s profit before tax increased by 1% to $18.9 billion.

In 2017, HSBC Qianhai Securities Limited began operations. It was the first joint venture securities company in mainland China to be majority-owned by a foreign bank. By the end of the 2017 financial year, the pivot to Asia had paid off and contributed to over 75% of the Group’s reported and adjusted profit.

In response to the Financial Services (Banking Reform) Act 2013 in the UK, HSBC Bank completed the set-up of its UK ring-fenced bank, HSBC UK, six months ahead of the legal deadline in 2018. That year, the bank launched a 2-year strategic initiative to grow its market share not only in the UK but also in Asia and other international markets.

Throughout 2019, HSBC introduced more than 160 new digital features for its retail customers. As a pioneer in the commercialization of blockchain, the bank completed 11 letters of credit transactions using the technology. This included the first cross-border transaction in China.

2020-Present: HSBC Prioritizes Sustainability

The pandemic, lower global interest rates, and trade tensions between the US and China, significantly affected the bank’s performance in 2020. In response, the bank reshaped its portfolio through exits and bolt-on acquisitions throughout 2021 and 2022. Subsequently, both years reflected an improvement in both performance and profitability.

In October 2022, the UK’s advertising watchdog banned a series of HSBC advertisements for misleading consumers about its green credentials. According to the ASA, the bank omitted material information related to its financing of fossil fuel projects and links to deforestation.

During 2023, HSBC continued to acquire businesses that enabled it to build scale and enhance its capabilities. The bank also made progress on its goal to become a digital-first bank, with over 80% of its customers adopting digital services.

In terms of strategic exits, the bank completed the sale of its retail banking operations in France, Mauritius, Greece, and New Zealand. Together, these moves contributed to a reported profit before tax of $30.3 billion, a significant $13.3 billion increase from 2022.

Between 2020 and 2024, HSBC provided and facilitated $294.4 billion in sustainable finance and investment, marking a significant $83.7 billion increase in the past year. Of this progress, $258.3 billion was dedicated to green and sustainable activities, while $36.1 billion focused on social initiatives.

In line with its commitment to environmental sustainability, HSBC achieved a 57.3% reduction in absolute greenhouse gas emissions from its 2019 baseline and published its first net-zero transition plan in January 2024. As of July 2024, HSBC had a market cap of $163.08 billion, placing it among the world’s top 10 banks.

HSBC Dividend History

HSBC shares are listed on the London Stock Exchange (HSBA.L), the Hong Kong Stock Exchange (0005. HK), the Bermuda Stock Exchange (HSBC.BH), and the New York Stock Exchange (ADR: HSBC). While the share price has fluctuated since 1988, shares have shown a general upward trend.

HSBC has declared dividends since it was founded in 1865. With a long history of steady dividends and maximizing shareholder value, the bank has traditionally been favored by investors.

In 2023, HSBC paid its highest full-year dividend per share since 2008. As of June 28, 2024, HSBC’s TTM dividend payout was $1.98, while its dividend yield was 4.55%.

History of the HSBC Logo

Below, we trace HSBC’s logo from its origins as a simple red and white flag, through to its transformation into an iconic global brand.

1865-1983: The Red and White Flag

One of the bank’s earliest identifying logos was a white rectangle, divided diagonally, to produce a red hourglass shape. As a flag, it flew proudly above the HSBC buildings from the 1890s (possibly earlier). Due to the bank’s Scottish origins, the design was likely inspired by the Scottish flag, the cross of St Andrew.

The other was its crest, which was typically displayed on official records and advertising campaigns. The crest combined a bustling harbor scene from Hong Kong’s Public Seal, with the UK’s royal coat of arms, including its lion and unicorn. The harbor scene illustrated the bank’s founding purpose of opening up opportunities for customers through global trade.

1983-1998: The HSBC Hexagon

In the late 1970s, HSBC launched a Corporate Identity project. The designers found inspiration in the bank’s traditional house flag and introduced a simple and unique design – the HSBC Hexagon. Paired with the shortened name ‘HongkongBank’ the bold red and white logo was versatile, and variations of the main design were available across the HSBC Group to cater to local preferences. Subsidiaries were even able to retain their original names if it strategically benefited their respective markets.

1998-Present: An Iconic Global Brand

In 1998, the bank adopted a unified brand worldwide. The distinctive red-and-white hexagon was paired with the abbreviated name “HSBC” and used everywhere the bank operated. By 1999, more than 300 subsidiaries had re-branded.

The Future of HSBC

HSBC’s history highlights the importance of identifying growth areas and opening up opportunities for customers. Initially founded to facilitate trade between China and other markets, the bank has amplified that vision, creating a global network of opportunities for its clients.

The bank’s successful global expansion also highlights the power of strategic acquisitions, particularly when venturing into new territories. Over the years, the HSBC Group has expanded through major acquisitions, leveraging its strong leadership and expertise to conquer lucrative local markets.

Looking ahead, HSBC plans to exploit growth opportunities in mainland China and the UK. Other strategic priorities include:

• Growing its international businesses.
• Diversifying its revenue across multiple markets.
• Investing in AI and other technologies to improve customer experience and increase efficiency.
• Achieving net-zero emissions in its operations and supply chain by 2030, and in its financed emissions by 2050.

Ultimately, HSBC’s vision is to be the preferred international financial partner for global consumers. Based on its history of resilience and customer centricity, the bank is well-positioned to meet its goals.

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