Midland Bank now unique as HSBC
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This is a digitised version of an article from The Cayman Compass's print archive. Occasionally, the digitisation process introduces transcription errors, or other problems.
See the article in its original context from September 1999.
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The HSBC Group has an international pedigree which is unique in banking history. Its name is derived from its founding member, The Hong Kong and Shanghai Banking Corporation Limited, which was established in 1865 by Thomas Sutherland.
Sutherland, who worked as the Hong Kong Superintendent of the Peninsular and Oriental Steam Navigation Company, realised the need to finance the growing trade between China and Europe. His Scottish nationality probably helped to earn the bank a reputation for being thrifty and conservative, a trait which is firmly acknowledged to this day.
The Hong Kong and Shanghai Banking Corporation's headquarters established at I Queen's Road in Hong Kong where they remain today. An office in Shanghai was opened in April 1865.
From the outset, trade finance was a strong feature of the bank's business. Tea and silk were two commodities that led the way to new geographical areas. A network of agencies and branches, based mainly in China and South-East Asia, was established soon after the bank's formation in Hong Kong and Shanghai. This formed the nucleus of activity that was to spread to the Indian sub-continent, Japan, Europe and North America.
In many of its branches, the bank was a pioneer of modern banking practices. It was the first bank in many Asian countries including Thailand, Brunei, Japan and the Gulf states.
The pioneering spirit of the Group was forged in its early years. The bank experienced the turbulent history of the regions where it operated. These experiences mark the Group's commitment to geographical and operational diversity, and stand the Group in good stead when one considers that times continue to be challenging.
Throughout the 1950s and 1960s, acquisitions and alliances were identified. In 1959, the bank purchased The British Bank of the Middle East (now HSBC Bank Middle East), formerly known as the Imperial Bank of Persia (established in 1889), and the Mercantile Bank which had its headquarters in Bombay.
A controlling interest was obtained in 1965 in Hang Seng Bank, which had been established in Hong Kong in 1933. By the 1970s, the policy of expansion by acquisition of subsidiaries with their own identities and specialisations was firmly in place.
During the 1980s, the bank concentrated on moving into those markets where it was not yet fully represented. Banks were established in Canada and Australia. In 1987, Marine Midland Bank (now HSBC Bank USA), based in New York State, became a wholly-owned member of the Group and its principal subsidiary in the United States.
HSBC Holdings plc, the parent company of the HSBC Group, established its headquarters in London in 1993.
The acquisition in July 1992 of Midland Bank in the United Kingdom created one of the largest banking and financial services organisations in the world. During 1997, the Group firmly established its presence in Latin America by forming Banco HSBC Bamerindus (now HSBC Bank Brazil S.A. - Banco Multiplo) in Brazil and Cont'd on page 21 from facing page
acquiring the Roberts Group in Argentina. Recently the Group announced its proposed acquisition of Republic New York Corporation and Safra Republic Holdings S.A.
As part of the financing of the proposed acquisition, US$3 billion of new shares were placed. This transaction currently holds the record as the largest single day equity offering.
HSBC Holdings plc is listed on the London, Hong Kong and New York stock exchanges. The New York listing, in the form of American Depositary Shares, makes HSBC Holdings pIc the largest foreign corporation listed on the exchange. As at 30 June 1999, total assets of the Group were US$497 billion. Approximately 170,000 shareholders noted a 12% increase in attributable profit, US$2.7 billion for the six months ended 30 June 1999.
HSBC Financial Services (Cayman) Limited has been operating in the Cayman Islands for 15 years.
The company was originally incorporated in 1984 as Samuel Montagu & Co (Cayman) Limited. Samuel Montagu was a leading London merchant bank that became a wholly-owned subsidiary of Midland Bank in 1986. Locally, the name was changed to Midland Bank Trust Corporation (Cayman) Limited in 1988 and the company became a member of the HSBC Group when Midland Bank was acquired in 1992.
HSBC Financial Services (Cayman) Limited provides a full range of offshore financial services. It holds an Unrestricted Class "A" Banking Licence, a Mutual Fund Administration Licence and an Insurance Manager's Licence. Operationally, the company has three client service areas: insurance, mutual funds and trusts. Services are provided to over 95 captive insurance companies and approximately 100 mutual funds. An operations department provides support to the client service areas and banking facilities are available to administrative clients. The company moved into its present building on the comer of Fort Street and Mary Street in July 1988. This is now home to 56 employees.
HSBC Group local offices are committed to providing employment and training to the region and this is a priority for HSBC Financial Services (Cayman) Limited.
The granting of university scholarships, internal education support and training, student vacation employment and regular participation in school work experience are some of the ways in which this goal is accomplished.
The company is committed to hiring Caymanian personnel for all positions and encourages the upward progression of its employees.
HSBC Financial Services (Cayman) Limited is about to launch a range of investment opportunities by introducing products designed and managed by HSBC Bank International Limited in Jersey. Established mutual funds will shortly become available to investors of all income levels.
Features such as protected capital, guaranteed income and monthly contribution schemes, specifically designed for the offshore residents have contributed to the popularity of the product lines and these products are considered sound a investment opportunity for local residents.
The financial services industry in Cayman is developing rapidly. HSBC Financial Services (Cayman) Limited continues to develop its expertise to meet the challenges and make a significant contribution to the island's success as the premier offshore centre. (HSBC)
