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Personal Financial Services

HSBC will strive to secure and maintain a leading position within each of its customer groups in selected markets. It will also focus on investing in its delivery platforms, its technology, its people and its brand to support the future value of HSBC as reflected in its comparative stock market rating and total shareholder return (‘TSR’). HSBC remains committed to benchmarking its performance both absolutely and by comparison with a peer group.

These values comprise an emphasis on long-term, ethical client relationships; high productivity through teamwork; a confident and ambitious sense of excellence; being international in outlook and character; prudence; creativity and customer-focused marketing. (2006) The plan also reaffirms HSBC’s recognition of its corporate social responsibility (‘CSR’). HSBC has always aspired to the highest standards of conduct, recognizes its wider obligations to society and believes there is a strong link between CSR, long-term success and value creation.

Moreover, changing public expectations across a wide spectrum of social, ethical and environmental issues require continuing attention to this area. The strategy therefore calls for a renewed emphasis on CSR and for increased external communication of the Group’s CSR policies and performance, particularly on education and the environment, which will remain the principal beneficiaries of HSBC’s philanthropic activities.

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(2006) HSBC’s growth ambitions centre on its four customer groups: Personal Financial Services; Commercial Banking; Corporate, Investment Banking and Markets; and Private Banking; and specific strategies are being implemented for each of them. HSBC believes that by organizing its internal and external reporting around customer groups, it reinforces to all its employees the Group’s customer focus. (2006)

Key elements in achieving HSBC’s objectives for its customer groups will be accelerating the rate of growth of revenue; developing the brand strategy further; improving productivity; and maintaining the Group’s prudent risk management and strong financial position. Developing the skills of HSBC’s staff will also be critical and it will be necessary to ensure that all employees understand how they can contribute to the successful achievement of the Group’s objectives. Employees who do make such a contribution will be rewarded accordingly.

(2006) In 2005 alone, HSBC spent US$4 billion on information technology. Their earnings varies depending on geographical location and Customer group. Geographical Contribution* North America 32. 8% Europe 30. 3% Hong Kong 21. 5% Rest of Asia Pacific 12. 3% South America 3. 1% Customer Group contribution* Personal Financial Services 47. 2% Corporate, Investment Banking & Markets 24. 6% Commercial Banking 23. 7% Private Banking 4. 4% Other 0. 1% (*Pretax profit for the year ended 31 December 2005) [2006]

There has been an annual rate of 17. 3% over the last 15 years and the return rate of 28. 5% or as one example that they have given, ? 100 invested in HSBC on 31 December 1990 would have been worth ? 4,281 at the end of 2005. (2006) I. Competitive Analysis All customers want a company that would work to their advantage without any surprises regarding deals made between him and the financial company. They would love someone who could provide them and first-rate service and a bank that has security that they could provide service for a long time.

Money matter is one issue among the working citizens that requires them to think a hundred times before getting the service of any financial company. There are a lot of companies that tries to persuade them to invest in their company and that they will be getting their money’s value. In United Kingdom, since the Consumer’s Association initiated a campaign persuading consumers to replace their financial service providers to those who are cheaper. HSBC currently charges 18. 3% on overdrafts, while Royal Bank of Scotland charges 17. 9%, Bank of Scotland 8. 9%, Lloyds TSB Scotland 17.3% and Clydesdale 19. 5%. (Hunter, 2002)

HSBC is not bothered by the competition and are still in sync with its competitors. One of HSBC’s tough competitors in the world market is Citigroup. Citigroup is now hailed as the world’s largest bank. HSBC’s Finance director Douglas Flint commented that they believe that it is healthy for the financial sector to have a lot of competitors. Flint also said that HSBC has a competitive edge especially in terms of geographies and customer groups. He is confident that their human and financial resources are stable enough to support their business.

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