Union Bank was established in 1991 and had its headquarters in Karachi, Sindh, Pakistan. Prior to the merger with Standard Chartered Bank (see below), it was Pakistan's eighth largest bank and had 65 branches in some 22 cities, about US$2 billion in assets, and about 400,000 customers.
In 2006, Standard Chartered Bank acquired 81% of Union Bank's shares for US$413 million. Under Pakistani law, it had to delist Union Bank and make an offer for the outstanding shares; the offer raised the total purchase price to about US$511. On 30 December 2006, Standard Chartered merged Union Bank with its own subsidiary in Pakistan, which has 46 branches in 10 cities. The merged bank is named Standard Chartered Bank (Pakistan) and is now Pakistan's sixth largest bank.
History
In 2000, Union Bank acquired Bank of America's operations in Pakistan. Then in July 2001, Union Bank signed an Independent Operator agreement for American Express Cards in Pakistan. In 2002, Union Bank acquired the operations in Pakistan of Emirates Bank International. This purchase helped Union Bank become one of the larger private banks in the country.
Branches
The bank had branches in Faisalabad, Multan, Gujrat, Peshawar, Gujranwala, Quetta, Hyderabad, Rahim Yar Khan, Islamabad, Raiwind, Jhelum, Rawalpindi, Karachi, Sahiwal, Lahore, Sargodha, Mardan, Sialkot, Mirpur, Swat, and Vehari.
Standard Chartered Bank
The history of Standard Chartered in Pakistan dates back to 1863, when the Chartered Bank of India, Australia and China first established its operations in Karachi. In 2006 Standard Chartered Bank acquired Pakistan's Union Bank. On 30 December 2006, Standard Chartered merged Union Bank with its own subsidiary, Standard Chartered Bank (Pakistan), to create Pakistan's sixth largest bank.
Barclays plc
Barclays plc is a major global financial services provider operating in Europe, North America, the Middle East, Latin America, Australia, Asia and Africa. It is a holding company that is listed on the London, New York and Tokyo stock exchanges. It is also a constituent of the FTSE 100 Index. It operates through its subsidiary Barclays Bank plc. Barclays PLC is ranked as the 25th largest company in the world according to Forbes Global 2000 (2008 list) and the fourth largest financial services provider in the world according to Tier 1 capital ($32.5 billion). It is the second largest bank in the United Kingdom based on asset size, although its share price, having fallen by 40% in the past year as of 10 May 2009 (2009 -05-10)[update], is considerably lower as a result of a fall in investor confidence. The bank's headquarters are at One Churchill Place in Canary Wharf, in London's Docklands, having moved there in May 2005 from Lombard Street in the City of London. The company also operates Barclays Bank of Delaware, which issues Juniper credit cards, one of the largest issuers of credit cards in the United States.
History Early years This bank traces its roots back to 1690 when John Freame and Thomas Gould started trading as Goldsmith bankers in Lombard Street London. The name "Barclays" became associated with the business in 1736, when James Barclay, son-in-law of John Freame, one of the founders, became a partner in the business. In 1728, the bank moved to 54 Lombard Street, which was identified by the 'Sign of the Black Spread Eagle', over the years becoming a core part of the bank's identity. In 1896 several banks in London and the English provinces, notably Backhouse's Bank of Darlington and Gurney's Bank of Norwich, united under the banner of Barclays and Co., a joint-stock bank. Between 1905 and 1916 Barclays extended its branch network by making acquisitions of small English banks. Further expansion followed in 1918 when Barclays amalgamated with the London, Provincial and South Western Bank and in 1919 when the British Linen Bank was acquired by Barclays Bank, although the British Linen Bank retained a separate board of directors and continued to issue its own bank notes. Then in 1924 the planned takeover of National Bank of Kingston reached near-completion but was halted three days before finalisation. Post War In 1965 Barclays established a US affiliate, Barclays Bank of California in San Francisco. Barclaycard, the first credit card in the UK, was launched in 1966 and in 1967 Barclays unveiled the first ATM cash machine at Enfield, north London. In 1969 the planned merger with Martins Bank and Lloyds Bank was blocked by the Mergers and Monopolies Commission but the acquisition of Martins Bank on its own was allowed. Also that year the British Linen Bank subsidiary was sold to the Bank of Scotland in exchange for a 25% stake, a transaction that became effective from March 1971. In 1980, Barclays Bank International expanded its business to include commercial credit and took over American Credit Corporation, renaming it BarclaysAmerican. Barclays became the first bank to re-open branches on Saturday mornings in 1982, twenty years after the practice ended. Two years later, in 1984, Barclays posted record profits. The following year Barclays Bank and Barclays Bank International merged: as part of the corporate reorganisation, the former Barclays Bank PLC became a group holding company, renamed as Barclays PLC and UK retail banking was integrated under the former BBI, and renamed Barclays Bank PLC. In 1985 Barclays introduced Connect, the first debit card in the United Kingdom. Then in 1986 Barclays sold its South African business operating under the Barclays National Bank name after protests against Barclays' involvement in South Africa and its apartheid government. Also that year Barclays bought de Zoete & Bevan and Wedd Durlacher to form BZW and to take advantage of the Big Bang on the London Stock Exchange. And in 1988 Barclays sold Barclays Bank of California to Wells Fargo Bank, N.A. Edgar Pearce, the "Mardi Gras Bomber", began a terror campaign against the bank and the supermarket chain Sainsbury's in 1994. In 1996 Barclays bought Wells Fargo Nikko Investment Advisors (WFNIA) and merged it with BZW Investment Management to form Barclays Global Investors. Two years later - in 1998 - the BZW business was broken up and parts were sold to Credit Suisse First Boston: Barclays retained the debt business which formed the foundation of what is now Barclays Capital. In 1999 in an unusual move as part of the trend at the time for free ISPs, Barclays launched an internet service called Barclays.net: this entity was acquired by British Telecom in 2001.
The new millennium Barclays on Queen Street in Morley, West Yorkshire The year 2000 saw the acquisition of Woolwich plc (formerly the Woolwich Building Society).[9] Then in 2001 Barclays closed 171 branches in the UK, many of them in rural communities: Barclays called itself "THE BIG BANK" but this name was quickly given a low profile after a series of embarrassing PR stunts. In 2003 Barclays bought the American credit card company Juniper Bank from CIBC, re-branding it as "Barclays Bank Delaware". The same year saw the acquisition of Banco Zaragozano, the 11th Spanish bank. Barclays took over sponsorship of the Premier League from Barclaycard in 2004. In 2005 Barclays sealed a £2.6bn takeover of Absa Group Limited, South Africa's largest retail bank, acquiring a 54% stake on 27 July 2005. Then in 2006 Barclays purchased the HomEq Servicing Corporation for $469 million in cash from Wachovia Corp. That year also saw the acquisition of the financial website Comparetheloan and Barclays announcing plans to rebrand Woolwich branches as Barclays, migrating Woolwich customers onto Barclays accounts and migrating back-office processes onto Barclays systems - the Woolwich brand was to be used for Barclays mortgages. In January 2007 Barclays announced that it has purchased the naming rights to the Barclays Center, a proposed 18,000-seat arena in Brooklyn, New York, where the New Jersey Nets planned to relocate. Planned merger with ABN AMRO In March 2007 Barclays announced plans to merge with ABN AMRO, the largest bank in the Netherlands.However, on 5 October 2007 Barclays announced that it had abandoned its bid,[ citing inadequate support by ABN shareholders. Fewer than 80% of shares had been tendered to Barclay's cash-and-shares offer.This left the consortium led by Royal Bank of Scotland free to proceed with its $99.9 cents counter-bid for ABN AMRO. To help finance its bid for ABN AMRO, Barclays sold a 3.1% stake to China Development Bank and a 3% stake to Temasek Holdings, the investment arm of the Singaporean government.[23] Also in 2007 Barclays agreed to purchase Equifirst Corporation from Regions Financial Corporation for $225 million.[24] That year also saw Barclays Personal Investment Management announcing the closure of their operation in Peterborough and its re-siting to Glasgow, laying off nearly 900 members of staff. Financing On 30 August 2007, Barclays was forced to borrow £1.6bn ($3.2bn) from the Bank of England sterling standby facility. This is made available as a last-resort when banks are unable to settle their debts to other banks at the end of daily trading.[26] Despite rumours about liquidity at Barclays, the loan was necessary due to a technical problem with their computerised settlement network. A Barclays spokesman was quoted as saying "There are no liquidity issues in the U.K markets. Barclays itself is flush with liquidity." On 9 November 2007, Barclays shares dropped 9% and were even temporarily suspended for a short period of time, due to rumours of a £4.8bn ($10bn) exposure to bad debts in the US. However, a Barclays spokesman denied the rumours.[28] Subsequent write-downs at the bank were announced to be £1 billion ($1.9 billion), much less than feared. In July 2008, Barclays attempted to raise £4.5bn through a non-traditional rights issue to shore up its weakened Tier 1 capital ratio, which involved a rights offer to existing shareholders and the sale of a stake to Sumitomo Mitsui Banking Corporation. Only 19% of shareholders took up their rights leaving investors China Development Bank and Qatar Investment Authority with increased holdings in the bank. In 2008 Barclays bought the credit card brand Goldfish for $70 million gaining 1.7 million customers, and $3.9 billion in receivables.Barclays also bought a controlling stake in the Russian retail bank Expobank for $745 million.Later in the year Barclays commenced its Pakistan operations with initial funding of $100 million. Barclays Looks to Sell Asset Management Unit (March 16, 2009) Lehman Brothers acquisition On September 16, 2008, Barclays announced its agreement to purchase, subject to regulatory approval, the investment-banking and trading divisions of Lehman Brothers, a United States financial conglomerate that had filed for bankruptcy. In the deal, Barclays will also acquire the New York headquarters building of Lehman Brothers. On September 20, 2008, a revised version of the deal, a $1.35 billion (£700 million) plan for Barclays plc to acquire the core business of Lehman Brothers (mainly Lehman's $960 million Midtown Manhattan office skyscraper, with responsibility for 9,000 former employees), was approved. Manhattan court bankruptcy Judge James Peck, after a 7 hour hearing, ruled: "I have to approve this transaction because it is the only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to imagine a similar emergency." Luc Despins, the creditors committee counsel, said: "The reason we're not objecting is really based on the lack of a viable alternative. We did not support the transaction because there had not been enough time to properly review it." In the amended agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase price for the real estate components of the deal would be $1.29 billion, including $960 million for Lehman's New York headquarters and $330 million for two New Jersey data centers. Lehman's original estimate valued its headquarters at $1.02 billion but an appraisal from CB Richard Ellis this week valued it at $900 million." Further, Barclays will not acquire Lehman's Eagle Energy unit, but will have entities known as Lehman Brothers Canada Inc, Lehman Brothers Sudamerica, Lehman Brothers Uruguay and its Private Investment Management business for high net-worth individuals. Finally, Lehman will retain $20 billion of securities assets in Lehman Brothers Inc that are not being transferred to Barclays. Barclays had a potential liability of $2.5 billion to be paid as severance, if it chooses not to retain some Lehman employees beyond the guaranteed 90 days. Recent developments Reuters later reported that the British government would inject £40 billion ($69 billion) into three banks including Barclays, which might seek over £7 billion. Barclays later confirmed that it rejected the Government’s offer and would instead raise £6.5 billion of new capital (£2 billion by cancellation of dividend and £4.5 billion from private investors). In January 2009 the press reported that further capital may be required and that while the government might be willing to fund this, it may be unable to do so because the previous capital investment from the Qatari state was subject to a proviso that no third party might put in further money without the Qataris receiving compensation at the value the shares had commanded in October 2008. In March 2009 it was reported that in 2008, Barclays received billions of dollars from its insurance arrangements with AIG, including $8.5bn from funds provided by the United States taxpayers to bail out AIG. On 16 March 2009 Barclays confirmed that it was planning to sell its exchange traded fund business iShares It is expected that the sale will earn the bank £4 billion Operations Constituents of the Barclays Group Barclays Bank PLC Mercers Debt Collection Agency Barclays Bank Delaware (formerly Barclaycard US, originally Juniper Bank, acquired 2003) Barclays Retail Bank — UK clearing bank Barclays Commercial Bank — Dealing with medium and larger corporate UK business.UK banks Barclays Wealth — Stockbrokers, Offshore and Private bank Barclays Private Clients International Ltd. — subsidiary based in the Isle of Man with branches in the Channel Islands Barclays Private Equity Barclaycard — Global credit card business Barclaycard US — Separate from the Barclaycard global operation, this is the corporation's US credit card operation (formerly known as "Juniper Bank"). Issues branded credit cards such as US Airways, Midwest Airlines, Frontier Airlines MasterCard, Airtran Airways Visa card, and Apple Store Visa and MasterCard accounts. Barclays Capital — Investment bank Barclays Global Investors — Investment management company Woolwich plc — UK mortgage brand Barclays Africa — To be transferred to ABSA (South Africa) Barclays Spain (550 branches) Barclays Portugal (162 branches) Barclays France Barclays Morocco Barclays Pakistan Absa Group Limited (South Africa) Firstplus Financial Group PLC Barclays Partner Finance (formerly Clydesdale Financial Services) Barclays India PT Bank Akita (due to be rebranded Barclays Bank Indonesia) Organisational structure Barclays is headed by Marcus Agius, the Group Chairman, who joined the Board on 1 September 2006 and succeeded Matthew Barrett as Chairman from 1 January 2007. Agius is also the senior executive Director of the BBC and was formerly Chairman of BAA PLC, Chairman of Lazard in London and a Deputy Chairman of Lazard LLC until 31 December 2006. Reporting directly to the Group Chairman is John Varley, the Group Chief Executive, who is responsible for the strategic direction and planning of all Barclays operations. Varley was appointed to the role in September 2004 prior to which he served as Deputy Chief Executive (January-September 2004) and Group Finance Director (2000-2003). The operating units of Barclays are grouped under two umbrellas; Investment Banking and Investment Management (IB&IM) and Global Retail and Commercial Banking (GRCB). IB&IM oversees three core operating units: Barclays Capital, Barclays Global Investors (BGI) and Barclays Wealth. GRCB oversees multiple operating units. Principally it has responsibility for UK Retail Banking (UKRB), Barclays Commercial Bank (formally UK Business Banking), Barclaycard and International Retail and Commercial Banking (IR&CB).
Board of Directors Barclays is headed by Group Chief Executive John Varley. Within the Group CEO's office are housed the central corporate functions of Human Resources, General Counsel, Corporate Affairs, Internal Audit and Group Chief of Staff. The company has no COO or CIO. Paul Idzik, the former COO, completed an organisational redesign that saw IT functions devolved to the core business divisions - Global Retail & Commercial Banking and Investment Banking - and, following completion Idzik resigned from his post. Serving alongside Mr. Varley on the Group's ExCo are: Chris Lucas - Group Finance Director Bob Diamond - President, Barclays PLC; CEO, Investment Management & Investment Banking Frederik (Frits) Seegers - CEO, Global Retail & Commercial Banking The Board Members are: Marcus Agius - Chairman David Booth - Non Executive Director Sir Richard Broadbent - Senior Independent Director Leigh Clifford - Non Executive Director Fulvio Conti - Non Executive Director Professor Sir Andrew Likierman - Non Executive Director Sir Michael Rake - Non Executive Director Stephen Russell - Non Executive Director Sir John Sunderland - Non Executive Director Patience Wheatcroft - Non Executive Director Simon Fraser - Non Executive Director Branches Barclays has over 1800 UK high street branches (including former Woolwich branches) and it has also joined up with the Post Office Ltd to provide personal banking services to customers who live near a Post Office branch and those who need financial services such as secured or unsecured loans. Worldwide, Barclays has over 4,750 branches in over 50 countries. Most Barclays branches have 24/7 ATMs. Barclays' customers and customers of many other banks can use Barclays ATMs free of charge. Barclays Capital is a strong investment arm owned by Barclays Bank PLC. Barclays Capital had created an investment funds business that handles billions of pounds daily, iShares. After much debate, Barclays president Bob Diamond, along with other Barclays bosses chose to sell the iShares business to further boost capital. The preliminary price for the business is £3billion, although Barclays has the flexibility to sell at a higher price, should a bidder show interest before the selling deadline. Barclays is a member of the Global ATM Alliance. Sponsorships Barclays advertising on the side of a Leeds taxi. Since 2004, Barclays has sponsored the Premier League and, from 2006, the Churchill Cup. Barclays also sponsored the Football League from 1987 until 1993, succeeding Today newspaper and being replaced by Endsleigh Insurance. It also sponsored the 2008 Dubai Tennis Championships.
Controversy Involvement with South Africa under apartheid Barclays bank was known by many in the 1980s as 'Boerclaysbank', due to its continued involvement in South Africa during the Apartheid regime. A student boycott of the bank led to a drop in its share of the UK student market from 27 per cent to 15 per cent by the time it pulled out in 1986. In 2006 a South African activist group, the Jubilee South Africa backed Khulumani Support Group, sought reparations from Barclays in addition to Citigroup, BP, Royal Dutch Shell, Ford, GM, and Deutsche Bank for their roles indirectly supporting the apartheid government in South Africa during the 1970s and 1980s. The legal proceedings are being heard at the Second Circuit Court of Appeals in New York, and the South African Ministry of Justice is seeking dismissal of the case on the grounds that it undermines its national sovereignty. Financial support for the Mugabe regime in Zimbabwe Barclays helps to fund President Robert Mugabe's regime in Zimbabwe. The most controversial of a set of loans provided by Barclays is the £30m it gives to help sustain land reforms that saw Mugabe seize white-owned farmland and drive more than 100,000 black workers from their homes. Opponents have called the bank's involvement a 'disgrace' and an 'insult' to the millions who have suffered human rights abuses.Barclays spokesmen say the bank has had customers in Zimbabwe for decades and abandoning them now would make matters worse, 'We are committed to continuing to provide a service to those customers in what is clearly a difficult operating environment". Barclays also provides two of Mugabe’s associates with bank accounts, ignoring European Union sanctions on Zimbabwe. The men are Elliot Manyika and minister of public service Nicholas Goche. Barclays has defended its position by insisting that the EU rules do not apply to its 67%-owned Zimbabwean subsidiary because it was incorporated outside the EU. Accusations of money laundering In March 2009, Barclays was accused of violating international anti-money laundering laws. According to the NGO Global Witness, the Paris branch of Barclays held the account of Equatorial Guinean President Teodoro Obiang's son, Teodorin Obiang, even after evidence that Obiang had siphoned oil revenues from government funds emerged in 2004. According to Global Witness, Obiang purchased a Ferrari and maintains a mansion in Malibu with the funds from this account. Senior management bonuses Robert Diamond, a US-born banker on the board of Barclays, was set to receive a £14.8m bonus in 2008 even though the subprime mortgage crisis in the US forced his group to take a £1.6bn hit in 2007. Tax avoidance In March 2009 Barclays obtained an injunction against The Guardian to remove from its website confidential leaked documents describing how SCM, Barclays' structured capital markets division, planned to use more than £11bn of loans to create hundreds of millions of pounds of tax benefits, via "an elaborate circuit of Cayman Islands companies, US partnerships and Luxembourg subsidiaries".In an editorial on the issue, the Guardian pointed out that due to the mismatch of resources tax-collectors (HMRC) have now to rely on websites such as Wikileaks to obtain such documents, and indeed the documents in question have now appeared on Wikileaks. Separately, another Barclays whistleblower revealed several days later that the SCM transactions had produced between £900m and £1bn in tax avoidance in one year, adding that "The deals start with tax and then commercial purpose is added to them." Links to the arms trade In December 2008 the British anti-poverty charity War on Want released a report documenting the extent to which Barclays and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that Barclays is the world's largest arms investor, holding £7.3 billion in shares in the arms manufacturers. The report also details Barclays' dealings with known producers of cluster munitions and depleted uranium.
History Early years This bank traces its roots back to 1690 when John Freame and Thomas Gould started trading as Goldsmith bankers in Lombard Street London. The name "Barclays" became associated with the business in 1736, when James Barclay, son-in-law of John Freame, one of the founders, became a partner in the business. In 1728, the bank moved to 54 Lombard Street, which was identified by the 'Sign of the Black Spread Eagle', over the years becoming a core part of the bank's identity. In 1896 several banks in London and the English provinces, notably Backhouse's Bank of Darlington and Gurney's Bank of Norwich, united under the banner of Barclays and Co., a joint-stock bank. Between 1905 and 1916 Barclays extended its branch network by making acquisitions of small English banks. Further expansion followed in 1918 when Barclays amalgamated with the London, Provincial and South Western Bank and in 1919 when the British Linen Bank was acquired by Barclays Bank, although the British Linen Bank retained a separate board of directors and continued to issue its own bank notes. Then in 1924 the planned takeover of National Bank of Kingston reached near-completion but was halted three days before finalisation. Post War In 1965 Barclays established a US affiliate, Barclays Bank of California in San Francisco. Barclaycard, the first credit card in the UK, was launched in 1966 and in 1967 Barclays unveiled the first ATM cash machine at Enfield, north London. In 1969 the planned merger with Martins Bank and Lloyds Bank was blocked by the Mergers and Monopolies Commission but the acquisition of Martins Bank on its own was allowed. Also that year the British Linen Bank subsidiary was sold to the Bank of Scotland in exchange for a 25% stake, a transaction that became effective from March 1971. In 1980, Barclays Bank International expanded its business to include commercial credit and took over American Credit Corporation, renaming it BarclaysAmerican. Barclays became the first bank to re-open branches on Saturday mornings in 1982, twenty years after the practice ended. Two years later, in 1984, Barclays posted record profits. The following year Barclays Bank and Barclays Bank International merged: as part of the corporate reorganisation, the former Barclays Bank PLC became a group holding company, renamed as Barclays PLC and UK retail banking was integrated under the former BBI, and renamed Barclays Bank PLC. In 1985 Barclays introduced Connect, the first debit card in the United Kingdom. Then in 1986 Barclays sold its South African business operating under the Barclays National Bank name after protests against Barclays' involvement in South Africa and its apartheid government. Also that year Barclays bought de Zoete & Bevan and Wedd Durlacher to form BZW and to take advantage of the Big Bang on the London Stock Exchange. And in 1988 Barclays sold Barclays Bank of California to Wells Fargo Bank, N.A. Edgar Pearce, the "Mardi Gras Bomber", began a terror campaign against the bank and the supermarket chain Sainsbury's in 1994. In 1996 Barclays bought Wells Fargo Nikko Investment Advisors (WFNIA) and merged it with BZW Investment Management to form Barclays Global Investors. Two years later - in 1998 - the BZW business was broken up and parts were sold to Credit Suisse First Boston: Barclays retained the debt business which formed the foundation of what is now Barclays Capital. In 1999 in an unusual move as part of the trend at the time for free ISPs, Barclays launched an internet service called Barclays.net: this entity was acquired by British Telecom in 2001.
The new millennium Barclays on Queen Street in Morley, West Yorkshire The year 2000 saw the acquisition of Woolwich plc (formerly the Woolwich Building Society).[9] Then in 2001 Barclays closed 171 branches in the UK, many of them in rural communities: Barclays called itself "THE BIG BANK" but this name was quickly given a low profile after a series of embarrassing PR stunts. In 2003 Barclays bought the American credit card company Juniper Bank from CIBC, re-branding it as "Barclays Bank Delaware". The same year saw the acquisition of Banco Zaragozano, the 11th Spanish bank. Barclays took over sponsorship of the Premier League from Barclaycard in 2004. In 2005 Barclays sealed a £2.6bn takeover of Absa Group Limited, South Africa's largest retail bank, acquiring a 54% stake on 27 July 2005. Then in 2006 Barclays purchased the HomEq Servicing Corporation for $469 million in cash from Wachovia Corp. That year also saw the acquisition of the financial website Comparetheloan and Barclays announcing plans to rebrand Woolwich branches as Barclays, migrating Woolwich customers onto Barclays accounts and migrating back-office processes onto Barclays systems - the Woolwich brand was to be used for Barclays mortgages. In January 2007 Barclays announced that it has purchased the naming rights to the Barclays Center, a proposed 18,000-seat arena in Brooklyn, New York, where the New Jersey Nets planned to relocate. Planned merger with ABN AMRO In March 2007 Barclays announced plans to merge with ABN AMRO, the largest bank in the Netherlands.However, on 5 October 2007 Barclays announced that it had abandoned its bid,[ citing inadequate support by ABN shareholders. Fewer than 80% of shares had been tendered to Barclay's cash-and-shares offer.This left the consortium led by Royal Bank of Scotland free to proceed with its $99.9 cents counter-bid for ABN AMRO. To help finance its bid for ABN AMRO, Barclays sold a 3.1% stake to China Development Bank and a 3% stake to Temasek Holdings, the investment arm of the Singaporean government.[23] Also in 2007 Barclays agreed to purchase Equifirst Corporation from Regions Financial Corporation for $225 million.[24] That year also saw Barclays Personal Investment Management announcing the closure of their operation in Peterborough and its re-siting to Glasgow, laying off nearly 900 members of staff. Financing On 30 August 2007, Barclays was forced to borrow £1.6bn ($3.2bn) from the Bank of England sterling standby facility. This is made available as a last-resort when banks are unable to settle their debts to other banks at the end of daily trading.[26] Despite rumours about liquidity at Barclays, the loan was necessary due to a technical problem with their computerised settlement network. A Barclays spokesman was quoted as saying "There are no liquidity issues in the U.K markets. Barclays itself is flush with liquidity." On 9 November 2007, Barclays shares dropped 9% and were even temporarily suspended for a short period of time, due to rumours of a £4.8bn ($10bn) exposure to bad debts in the US. However, a Barclays spokesman denied the rumours.[28] Subsequent write-downs at the bank were announced to be £1 billion ($1.9 billion), much less than feared. In July 2008, Barclays attempted to raise £4.5bn through a non-traditional rights issue to shore up its weakened Tier 1 capital ratio, which involved a rights offer to existing shareholders and the sale of a stake to Sumitomo Mitsui Banking Corporation. Only 19% of shareholders took up their rights leaving investors China Development Bank and Qatar Investment Authority with increased holdings in the bank. In 2008 Barclays bought the credit card brand Goldfish for $70 million gaining 1.7 million customers, and $3.9 billion in receivables.Barclays also bought a controlling stake in the Russian retail bank Expobank for $745 million.Later in the year Barclays commenced its Pakistan operations with initial funding of $100 million. Barclays Looks to Sell Asset Management Unit (March 16, 2009) Lehman Brothers acquisition On September 16, 2008, Barclays announced its agreement to purchase, subject to regulatory approval, the investment-banking and trading divisions of Lehman Brothers, a United States financial conglomerate that had filed for bankruptcy. In the deal, Barclays will also acquire the New York headquarters building of Lehman Brothers. On September 20, 2008, a revised version of the deal, a $1.35 billion (£700 million) plan for Barclays plc to acquire the core business of Lehman Brothers (mainly Lehman's $960 million Midtown Manhattan office skyscraper, with responsibility for 9,000 former employees), was approved. Manhattan court bankruptcy Judge James Peck, after a 7 hour hearing, ruled: "I have to approve this transaction because it is the only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to imagine a similar emergency." Luc Despins, the creditors committee counsel, said: "The reason we're not objecting is really based on the lack of a viable alternative. We did not support the transaction because there had not been enough time to properly review it." In the amended agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase price for the real estate components of the deal would be $1.29 billion, including $960 million for Lehman's New York headquarters and $330 million for two New Jersey data centers. Lehman's original estimate valued its headquarters at $1.02 billion but an appraisal from CB Richard Ellis this week valued it at $900 million." Further, Barclays will not acquire Lehman's Eagle Energy unit, but will have entities known as Lehman Brothers Canada Inc, Lehman Brothers Sudamerica, Lehman Brothers Uruguay and its Private Investment Management business for high net-worth individuals. Finally, Lehman will retain $20 billion of securities assets in Lehman Brothers Inc that are not being transferred to Barclays. Barclays had a potential liability of $2.5 billion to be paid as severance, if it chooses not to retain some Lehman employees beyond the guaranteed 90 days. Recent developments Reuters later reported that the British government would inject £40 billion ($69 billion) into three banks including Barclays, which might seek over £7 billion. Barclays later confirmed that it rejected the Government’s offer and would instead raise £6.5 billion of new capital (£2 billion by cancellation of dividend and £4.5 billion from private investors). In January 2009 the press reported that further capital may be required and that while the government might be willing to fund this, it may be unable to do so because the previous capital investment from the Qatari state was subject to a proviso that no third party might put in further money without the Qataris receiving compensation at the value the shares had commanded in October 2008. In March 2009 it was reported that in 2008, Barclays received billions of dollars from its insurance arrangements with AIG, including $8.5bn from funds provided by the United States taxpayers to bail out AIG. On 16 March 2009 Barclays confirmed that it was planning to sell its exchange traded fund business iShares It is expected that the sale will earn the bank £4 billion Operations Constituents of the Barclays Group Barclays Bank PLC Mercers Debt Collection Agency Barclays Bank Delaware (formerly Barclaycard US, originally Juniper Bank, acquired 2003) Barclays Retail Bank — UK clearing bank Barclays Commercial Bank — Dealing with medium and larger corporate UK business.UK banks Barclays Wealth — Stockbrokers, Offshore and Private bank Barclays Private Clients International Ltd. — subsidiary based in the Isle of Man with branches in the Channel Islands Barclays Private Equity Barclaycard — Global credit card business Barclaycard US — Separate from the Barclaycard global operation, this is the corporation's US credit card operation (formerly known as "Juniper Bank"). Issues branded credit cards such as US Airways, Midwest Airlines, Frontier Airlines MasterCard, Airtran Airways Visa card, and Apple Store Visa and MasterCard accounts. Barclays Capital — Investment bank Barclays Global Investors — Investment management company Woolwich plc — UK mortgage brand Barclays Africa — To be transferred to ABSA (South Africa) Barclays Spain (550 branches) Barclays Portugal (162 branches) Barclays France Barclays Morocco Barclays Pakistan Absa Group Limited (South Africa) Firstplus Financial Group PLC Barclays Partner Finance (formerly Clydesdale Financial Services) Barclays India PT Bank Akita (due to be rebranded Barclays Bank Indonesia) Organisational structure Barclays is headed by Marcus Agius, the Group Chairman, who joined the Board on 1 September 2006 and succeeded Matthew Barrett as Chairman from 1 January 2007. Agius is also the senior executive Director of the BBC and was formerly Chairman of BAA PLC, Chairman of Lazard in London and a Deputy Chairman of Lazard LLC until 31 December 2006. Reporting directly to the Group Chairman is John Varley, the Group Chief Executive, who is responsible for the strategic direction and planning of all Barclays operations. Varley was appointed to the role in September 2004 prior to which he served as Deputy Chief Executive (January-September 2004) and Group Finance Director (2000-2003). The operating units of Barclays are grouped under two umbrellas; Investment Banking and Investment Management (IB&IM) and Global Retail and Commercial Banking (GRCB). IB&IM oversees three core operating units: Barclays Capital, Barclays Global Investors (BGI) and Barclays Wealth. GRCB oversees multiple operating units. Principally it has responsibility for UK Retail Banking (UKRB), Barclays Commercial Bank (formally UK Business Banking), Barclaycard and International Retail and Commercial Banking (IR&CB).
Board of Directors Barclays is headed by Group Chief Executive John Varley. Within the Group CEO's office are housed the central corporate functions of Human Resources, General Counsel, Corporate Affairs, Internal Audit and Group Chief of Staff. The company has no COO or CIO. Paul Idzik, the former COO, completed an organisational redesign that saw IT functions devolved to the core business divisions - Global Retail & Commercial Banking and Investment Banking - and, following completion Idzik resigned from his post. Serving alongside Mr. Varley on the Group's ExCo are: Chris Lucas - Group Finance Director Bob Diamond - President, Barclays PLC; CEO, Investment Management & Investment Banking Frederik (Frits) Seegers - CEO, Global Retail & Commercial Banking The Board Members are: Marcus Agius - Chairman David Booth - Non Executive Director Sir Richard Broadbent - Senior Independent Director Leigh Clifford - Non Executive Director Fulvio Conti - Non Executive Director Professor Sir Andrew Likierman - Non Executive Director Sir Michael Rake - Non Executive Director Stephen Russell - Non Executive Director Sir John Sunderland - Non Executive Director Patience Wheatcroft - Non Executive Director Simon Fraser - Non Executive Director Branches Barclays has over 1800 UK high street branches (including former Woolwich branches) and it has also joined up with the Post Office Ltd to provide personal banking services to customers who live near a Post Office branch and those who need financial services such as secured or unsecured loans. Worldwide, Barclays has over 4,750 branches in over 50 countries. Most Barclays branches have 24/7 ATMs. Barclays' customers and customers of many other banks can use Barclays ATMs free of charge. Barclays Capital is a strong investment arm owned by Barclays Bank PLC. Barclays Capital had created an investment funds business that handles billions of pounds daily, iShares. After much debate, Barclays president Bob Diamond, along with other Barclays bosses chose to sell the iShares business to further boost capital. The preliminary price for the business is £3billion, although Barclays has the flexibility to sell at a higher price, should a bidder show interest before the selling deadline. Barclays is a member of the Global ATM Alliance. Sponsorships Barclays advertising on the side of a Leeds taxi. Since 2004, Barclays has sponsored the Premier League and, from 2006, the Churchill Cup. Barclays also sponsored the Football League from 1987 until 1993, succeeding Today newspaper and being replaced by Endsleigh Insurance. It also sponsored the 2008 Dubai Tennis Championships.
Controversy Involvement with South Africa under apartheid Barclays bank was known by many in the 1980s as 'Boerclaysbank', due to its continued involvement in South Africa during the Apartheid regime. A student boycott of the bank led to a drop in its share of the UK student market from 27 per cent to 15 per cent by the time it pulled out in 1986. In 2006 a South African activist group, the Jubilee South Africa backed Khulumani Support Group, sought reparations from Barclays in addition to Citigroup, BP, Royal Dutch Shell, Ford, GM, and Deutsche Bank for their roles indirectly supporting the apartheid government in South Africa during the 1970s and 1980s. The legal proceedings are being heard at the Second Circuit Court of Appeals in New York, and the South African Ministry of Justice is seeking dismissal of the case on the grounds that it undermines its national sovereignty. Financial support for the Mugabe regime in Zimbabwe Barclays helps to fund President Robert Mugabe's regime in Zimbabwe. The most controversial of a set of loans provided by Barclays is the £30m it gives to help sustain land reforms that saw Mugabe seize white-owned farmland and drive more than 100,000 black workers from their homes. Opponents have called the bank's involvement a 'disgrace' and an 'insult' to the millions who have suffered human rights abuses.Barclays spokesmen say the bank has had customers in Zimbabwe for decades and abandoning them now would make matters worse, 'We are committed to continuing to provide a service to those customers in what is clearly a difficult operating environment". Barclays also provides two of Mugabe’s associates with bank accounts, ignoring European Union sanctions on Zimbabwe. The men are Elliot Manyika and minister of public service Nicholas Goche. Barclays has defended its position by insisting that the EU rules do not apply to its 67%-owned Zimbabwean subsidiary because it was incorporated outside the EU. Accusations of money laundering In March 2009, Barclays was accused of violating international anti-money laundering laws. According to the NGO Global Witness, the Paris branch of Barclays held the account of Equatorial Guinean President Teodoro Obiang's son, Teodorin Obiang, even after evidence that Obiang had siphoned oil revenues from government funds emerged in 2004. According to Global Witness, Obiang purchased a Ferrari and maintains a mansion in Malibu with the funds from this account. Senior management bonuses Robert Diamond, a US-born banker on the board of Barclays, was set to receive a £14.8m bonus in 2008 even though the subprime mortgage crisis in the US forced his group to take a £1.6bn hit in 2007. Tax avoidance In March 2009 Barclays obtained an injunction against The Guardian to remove from its website confidential leaked documents describing how SCM, Barclays' structured capital markets division, planned to use more than £11bn of loans to create hundreds of millions of pounds of tax benefits, via "an elaborate circuit of Cayman Islands companies, US partnerships and Luxembourg subsidiaries".In an editorial on the issue, the Guardian pointed out that due to the mismatch of resources tax-collectors (HMRC) have now to rely on websites such as Wikileaks to obtain such documents, and indeed the documents in question have now appeared on Wikileaks. Separately, another Barclays whistleblower revealed several days later that the SCM transactions had produced between £900m and £1bn in tax avoidance in one year, adding that "The deals start with tax and then commercial purpose is added to them." Links to the arms trade In December 2008 the British anti-poverty charity War on Want released a report documenting the extent to which Barclays and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that Barclays is the world's largest arms investor, holding £7.3 billion in shares in the arms manufacturers. The report also details Barclays' dealings with known producers of cluster munitions and depleted uranium.
HSBC
HSBC Holdings plc is a public limited company incorporated in England and Wales in 1990, and headquartered in London since 1993. As of 2009, it is both the world's largest banking group and the world's 6th largest company according to a composite measure by Forbes magazine. The group was founded from The Hongkong and Shanghai Banking Corporation based in Hong Kong, the acronym of which led to the current name. Today, whilst no single geographical area dominates the group's earnings, Hong Kong still continues to be a significant source of its income. Recent acquisitions and expansion in China are returning HSBC to part of its roots. HSBC has an enormous operational base in Asia and significant lending, investment, and insurance activities around the world. The company has a global reach and financial fundamentals matched by few other banking or financial multinationals. HSBC is listed on the London, New York, Hong Kong, Paris and Bermuda Stock Exchanges, and is a constituent of the FTSE 100 Index and the Hang Seng Index.
History Development of the Bank HSBC Main Building, located in Hong Kong. HSBC World Headquarters at 8 Canada Square in London, from the western end of West India Quay HSBC Holdings was established in 1990 and became the parent company to The Hongkong and Shanghai Banking Corporation in preparation for its purchase of Midland Bank and a change of domicile for the transfer of sovereignty of Hong Kong. Shares in HSBC Holdings, which gave HSBC a substantial presence in the UK, was completed in 1992. HSBC then moved the headquarters of HSBC Holdings from 1 Queens Road Central, Hong Kong to 10 Lower Thames Street, London in 1993. Major acquisitions in South America started with the purchase of Banco Bamerindus of Brazil for $1bn in March 1997 and the acquisition of Roberts SA de Inversiones of Argentina for $600m in May 1997. In May 1999 HSBC embarked on a major acquisition in the United States with the purchase of Republic National Bank of New York for $10.3bn. Expansion into Continental Europe took place in April 2000 with the acquisition of Crédit Commercial de France, a large French bank for £6.6bn. In July 2001 HSBC bought Demirbank, an insolvent Turkish bank. Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's largest retail bank for $1.1bn. The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in April 2003. Then in September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m. A terrorist attack took place in November 2003: a bomb blast in Istanbul damaged the bank’s head office in Turkey, causing several deaths and hundreds of injuries. In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai. In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for £763m in December 2004. Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August and 70.1% of Dar Es Salaam Investment Bank of Iraq in October. In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m. In December 2007 HSBC acquired The Chinese Bank in Taiwan. In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm. Role in subprime crisis In November 2002 HSBC expanded in the United States, spending £9bn (US$15.5bn) to acquire Household Finance Corporation (HFC), a US credit card issuer and subprime lender. In a 2003 cover story, The Banker noted "when banking historians look back, they may conclude that [it] was the deal of the first decade of the 21st century". Under the new name of HSBC Finance, the division was the second largest subprime lender in the US. The business indeed turned sour, costing HSBC some US$62bn[citation needed]. In March 2009, HSBC announced that it would shut down the branch network of its HSBC Finance arm in the U.S., leading to nearly 6,000 job losses, and leaving only the credit card business to continue operating. Chairman Stephen Green admitted that "it’s an acquisition we wish we hadn’t done with the benefit of hindsight"; analyst Colin Morton said, "the takeover was an absolute disaster". Although it was at the centre of the subprime storm, the wider group has weathered the economic crisis better than other global banks. According to Bloomberg, "HSBC is one of world’s strongest banks by some measures." When HM Treasury required all UK banks to increase their capital in October 2007, the group transferred £750 million to London within hours, and announced that it had just lent £4 billion to other UK banks. In March 2009, it announced that it had made US$9.3bn of profit in 2008 and announced a £12.5bn (US$17.7bn; HK$138bn) rights issue to enable it to buy other banks that were struggling to survive. However, uncertainty over the rights' issue's implications for institutional investors caused volatility in the Hong Kong stock market: on 9 March 2009 HSBC's share price fell 24.14%, with 12 million shares sold in the last few seconds of trading. Operations Corporate profile In February 2008, HSBC was named the world's most valuable banking brand by The Banker magazine. Not known for marked fluctuations in securities exchanges around the world relative to its rivals, HSBC is more well known in banking circles for its conservative and risk-averse approach in its business operations - a company tradition going back to the 19th century.In its technical management, however, HSBC has recently suffered a series of headline-making incidents in which some customer data were allegedly leaked or simply went missing. Although the consequences turned out to be small, the embarrassing effect on the group's image did not go unnoticed.
As of April 2, 2008, according to Forbes magazine, HSBC was the fourth largest bank in the world in terms of assets ($2,348.98 billion), the second largest in terms of sales ($146.50 billion), the largest in terms of market value ($180.81 billion). It was also the most profitable bank in the world with $19.13 billion in net income in 2007 (compared to Citigroup's $3.62 billion and Bank of America's $14.98 billion in the same period). HSBC is by far the largest bank both in the United Kingdom and in Hong Kong and prints most of Hong Kong's local currency in its own name. Since the end of 2005, HSBC has been the largest banking group in the world by Tier 1 capital. The HSBC Group has a significant presence in each of the world's major financial markets, with the Americas, Asia Pacific and Europe each representing around one third of the business. With 9,500 offices in 86 countries, 210,000 shareholders, 330,000 staff and 128 million customers worldwide, HSBC arguably has the most international presence among the world's multinational banking giants. The HSBC Group operates as a number of local banks around the world. Outlined below are countries which, in 2007, generated the top 20 profit before tax figures, with the addition of the United States as specific issues exclude that country from the top 20 for 2007.For details of other group companies see Category:HSBC. Americas HSBC Bank Argentina SA has around 150 branches throughout Argentina providing a full range of banking and financial products and services to over 1.2 million customers. HSBC acquired The Bank of Bermuda Limited in February 2004 for US$1.3bn. Founded in 1889, Bank of Bermuda is a leading provider of fund administration, trust, custody, asset management and banking services. Since the acquisition the group has focused its global efforts in some areas of these services on the island. HSBC Bank Brasil SA is HSBC’s largest presence in South America. HSBC is now among the ten largest banks in Brazil, with more than 1,700 branches and sub-branches in 550 Brazilian cities. Palacio Avenida: The headquarters of HSBC Bank Brasil, located in Curitiba. HSBC Bank Canada is the seventh largest bank in Canada, with offices in every province except for Prince Edward Island, and is the largest foreign-owned bank in the country. HSBC has a very strong presence in overseas Chinese communities, especially in Vancouver and Toronto[citation needed]. The bank's headquarters are located in Vancouver, British Columbia. HSBC Chile The HSBC Group first set up operations in Chile in 1981. Presently, HSBC Bank Chile is focusing on Global Banking and Commercial Bank businesses. Banco HSBC (Costa Rica) S.A. operates around 40 branches throughout the major cities and is the third largest bank in the country. In the summer of 2007 HSBC acquired Grupo Banistmo in Panama, the owner of Banco Banex in Costa Rica. HSBC El Salvador, SA is the third largest banking and financial service firm in the country. HSBC Honduras has 49 branches and is one of the largest banks in the country. HSBC acquired Banco Grupo El Ahorro Hondureño (BGA) when it acquired Banistmo in Panama. Banistmo had bought the bank in 2002, about a year after it was formed from the merger of Banco La Capitalizadora Hondureña (Bancahsa; est. 1948) and the Banco del Ahorro Hondureño. HSBC Mexico, SA is one of Mexico’s four largest banking and financial service companies, with 1,400 branches, 4,800 ATMs and 6 million customers. HSBC purchased Banco Internacional, SA known as Bital, in November 2002, rebranding it overnight in January 2004. HSBC Panama, SA HSBC's presence in Panama dates back to 1972. In 2000, HSBC Bank USA acquired Chase Manhattan's full-service, stand-alone bank business, which includes retail and wholesale capabilities. The acquisition included 11 full-service branches: seven branches in Panama City, two branches in Colon City, one branch in David and one branch in Chitre. At the time of the acquisition, HSBC operated in Panama as a full-service branch of HSBC Bank plc, with a strong franchise in corporate business as well as five retail branches. The acquisition of Chase Manhattan's business more than doubled HSBC's assets in Panama. Then in 2006, HSBC bought Grupo Banistmo, the largest financial services company in Central America, based in Panama for $1.8bn. HSBC established HSBC Paraguay SA when it acquired Lloyds TSB Bank Paraguay in 2007. Lloyds TSB had been in Paraguay since 1920 when the Bank of London and the River Plate established a branch in Asunción. HSBC Bank Peru S.A. In October 2006, HSBC began the first phase of its plan business in Peru, with the aim of meeting small, medium and large companies during the second half of 2007 is implemented and a network of Personal Banking initial agency in Lima that will expand gradually. HSBC Bank USA NA and HSBC Finance Corporation represent the group’s business in the US, which has been built up via the acquisition of Marine Midland (1980), Republic National Bank (1999), Household International (2003) and Metris Companies (2005) Solstice Capital Group (2006), among others. HSBC Bank USA, headquartered in Wilmington, Delaware (as of 2008), is a full service bank, with a strong branch network in New York State but also operating nationwide. HSBC Finance Corporation focuses on selected lines of consumer lending with a branch network across the US. Asia Pacific The HSBC Global Technology Centre in Pune, India develops software for the entire HSBC group. HSBC in Kolkata. HSBC Bank Australia Limited gained its banking licence in 1986. Today, the bank offers a full range of Personal and Commercial services via a network of branches as well as direct channels. HSBC Bangladesh opened its first branch in 1996 and now has 10 offices there. HSBC Bank (China) Company Limited and HSBC Rural Bank Company Limited HSBC established its Shanghai branch office on 3 April 1865 and has had a continuous presence in the city since then, except for a break during the Japanese Occupation. Until the economic reforms of the late 1970s, its activities were mainly in inward remittances and export bills, however its activities now span a wider range. HSBC has purchased stakes in various local firms, including 19% of Bank of Communications, 8% of Bank of Shanghai, 16.8% of Ping An Insurance and via its subsidiary Hang Seng Bank, 12.8% of Industrial Bank. In 1996, HSBC was one of the first foreign banks approved to conduct renminbi business in Shanghai. The bank opened a new office in Chengdu and received approval to open a branch in Pudong and upgrade its Dalian office to a branch. HSBC first opened for business in Hong Kong on 3 March 1865. It is one of three commercial banks that issue Hong Kong dollar banknotes in the Hong Kong SAR and has the largest share by value. The Hang Seng Index for stock prices in Hong Kong is named after the Hang Seng Bank Limited, which is a subsidiary of HSBC. The two banks are today first and second by market share in Hong Kong. In 1959 HSBC acquired The Mercantile Bank of India, London and China, established in October 1853 in Bombay. 1990. HSBC is now one of the fastest growing foreign banks in India, both in domestic banking and support operations for worldwide operations (see Group Service Centres). HSBC opened its first Indonesian office in Batavia in 1884 to serve the sugar trade. It then expanded its operation to Surabaya in 1896. Later in 1994 HSBC upgraded its Semarang agency, which had been operating since 1878, into a full branch. HSBC twice closed its operations in Indonesia. The first time was during World War II, though it immediately returned after the war. In the mid-1960s, the Indonesia government forced the bank to close again, but the bank received a new banking license in 1968. In October 2008, HSBC paid US$608 million to acquire 89% of Bank Ekonomi, which had 2,200 staff, 86 branches, and about US$1.8 billion in assets. The acquisition made HSBC the third largest bank in the country, and gave it a total of 190 branches in 24 cities. HSBC Bank Malaysia Berhad traces its history back to the opening of the first HSBC office in Penang in 1884. The bank later became an issuer of currency notes for the Malaysian government. In 1994, HSBC became the first foreign bank to incorporate locally, forming Hongkong Bank Malaysia Berhad (now HSBC Bank Malaysia Berhad). The bank today provides a full range of personal and commercial financial services. HSBC Holdings plc in London UK is set to shift a significant number of jobs from Britain to its new operational headquarters in Cyberjaya, Malaysia. HSBC operates a call centre in Cyberjaya,Malaysia, a cybercity in Malaysia. HSBC started its operations in Pakistan in 1982. Since then it has expanded to all major cities of Pakistan and operates as a full service bank. It currently has 12 offices: four in Karachi, two in Lahore, two in Islamabad and one each in Rawalpindi, Sialkot, Multan and Faisalabad. The head-office is based in Karachi. The HSBC Group is represented in the Philippines through The Hongkong and Shanghai Banking Corporation Limited, and its subsidiary, the locally-incorporated HSBC Savings Bank (Philippines) Inc. HSBC opened its first branch in the Philippines in Binondo in November 1875. In 1883, a second branch was opened in Iloilo to serve the growing sugar industry. In 1971, the branch in Binondo was moved to Makati City. Ten years later, in 1981, the Iloilo branch was closed and a new branch in Ortigas Center, Pasig City, was opened. HSBC operates as a full service bank with its headquarters in Collyer Quay. It is an approved Primary Dealer in the Singapore Government Securities Market and an Approved Bond Intermediary, with over a hundred staff operating one of the largest integrated dealing rooms in Singapore. HSBC (Sri Lanka) traces its presence there to 1 July 1892. In 1882, HSBC appointed Delmege Reid and Co., which became Delmege Forsyth and Co. Ltd., as its agent in Colombo. In 1892, after the collapse of the New Oriental Banking Corporation HSBC saw an opportunity and established a branch. HSBC (Thailand) initially opened a branch in Bangkok in 1888, becoming the first commercial bank in the country. In 1889 HSBC issued the first banknotes in Thailand. Later, in 1905, HSBC joined with France's Banque de l'Indochine to issue the first foreign loan to the Thai government for its railroad construction project. HSBC Bank (Vietnam) Company Limited HSBC has had a long history in Vietnam, having opened a branch in Saigon in 1870. The branch operated for over 100 years, until its closure in 1975. In 1992, the bank opened representative offices in Ho Chi Minh City (HCMC) and Hanoi; HSBC upgraded the office in HCMC to a full-service branch in August 1995. Europe HSBC Bank Armenia cjsc is a 70 per cent indirectly owned subsidiary of HSBC Bank. Armenian business interests own the remaining equity. The bank began operations as Midland Armenia Bank in Yerevan in March 1996 and was the first international bank to open in Armenia. It is one of the leading banks in the foreign exchange market. HSBC opened its Prague Branch in May 1997. HSBC SA operates around 380 branches in France since the takeover of Credit Commercial de France, primarily operating under the HSBC brand. HSBC France is now the HSBC Group’s lead bank in the Eurozone, focusing on certain capital market products for a global audience, and high net worth and international business in France. HSBC Trinkaus & Burkhardt AG traces its origins to 1785. It has operations in private, commercial and investment banking and asset management. HSBC Hellas HSBC has been operating in Greece since 1981. In 2001, HSBC acquired Barclay's operations in Greece, which amounted to 13 branches and included fund management. HSBC Bank Malta plc is one of the largest banks in Malta. It is a listed company but its majority shareholder is the HSBC Group. HSBC Bank Malta traces its origins back to the founding of the Anglo-Egyptian Bank in 1864, which makes it the second oldest bank in Malta. HSBC (Spain) dates back to the establishment of a branch in Madrid in 1982. HSBC Private Bank is the Swiss operating subsidiaries of the group's Private Banking business, with 12 locations in the country. HSBC Bank AS is now the fifth largest private bank in Turkey, having expanded through internal financing and via acquisition since entering the market in 1990. The bank has a network of around 190 branches, offering products and services to corporate, commercial and personal customers, both under the HSBC brand as well as the Advantage brand. HSBC Bank plc is one of the "Big Five" high street banks in the UK, maintaining a large network of branches in England and Wales, with a smaller presence in Scotland and Northern Ireland. It acquired this presence in 1992 with the acquisition of Midland Bank plc. It also operates the previously Midland-owned telephone and internet bank First Direct, the consumer lending brand Beneficial Finance, and the financial services divisions of Marks & Spencer and the John Lewis Partnership. In Russia, HSBC operates through OOO HSBC Bank,which is the 103rd largest bank in the country and is an affiliate of HSBC Bank plc. Middle East and Africa HSBC Algeria commenced operating in 2008, after HSBC received permission in 2007 from the Bank of Algeria to establish a subsidiary. The branch has a capital of 2,5 billion dinars, or about 25 million euros, which it will increase to 3,6 billion dinars (36 million euros) within three years. It is headed by an Algerian, Rachid Sekak, the former head of foreign debt at the Bank of Algeria, who had earlier came from HSBC's operations in Paris. HSBC Bank Egypt SAE traces its origins to a joint-venture bank established in 1982. In 2001 HSBC was able to increase its ownership stake from 40% to 94.5%, after which it rebranded the bank as part of the HSBC group. In the Hashemite Kingdom of Jordan, the HSBC Group is represented by HSBC Bank Middle East Limited, the largest and most widely represented international bank in the Middle East. HSBC's presence dates back to its acquisition in 1959 of British Bank of the Middle East, which had been present in Jordan since 1889. HSBC dates its presence in Lebanon to 1949. HSBC has branches located in St. Georges Bay, Dora, Ras Beirut, Verdun and Zouk. SABB (The Saudi British Bank) In Saudi Arabia HSBC is represented by The Saudi British Bank, which is a 40% owned affiliate. HSBC is also a joint venture partner in HSBC Saudi Arabia Limited, the Kingdom’s first full service independent investment bank. HSBC Bank Middle East Limited The United Arab Emirates represents a key part of HSBC Bank Middle East's business, with 16 branches and the firm's head office located here. HSBC established an indirect presence in Sub-Saharan Africa in 1981 through Equator Bank, a joint venture with Nedbank and the bank's executives, and entered the South African market in 1995 with a representative office. In 2003, HSBC converted the reop office in Johannesburg to a branch. The Johannesburg branch is now the regional management office for all of HSBC's Sub-Saharan Africa activities and offers corporate banking, transaction banking, investment banking, treasury and capital markets services to HSBC's major multinational clients, large local corporate and financial institutions, and governments. HSBC Securities (South Africa) offers equities services. Global product lines and programmes Group Service Centres As a cost saving measure HSBC is offshoring processing work to lower cost economies in order to reduce the cost of providing services in developed countries. These locations take on work such as data processing and customer service, but also internal software engineering at Pune, Hyderabad (India),Visakahpatnam (India),Kolkota(India) Guangzhou (China) and Curitiba (Brazil). Chief Operating Officer Alan Jebson said in March 2005 that he would be very surprised if fewer than 25,000 people were working in the centres over the next three years: “I don’t have a precise target but I would be surprised if we had less than 15 (global service centres) in three years’ time.” He went on to say that each centre cost the bank from $20m to $30m to set up, but that for every job moved the bank saves about $20,000 (£10,400). Trade unions, particularly in the US and UK, blame these centres for job losses in developed countries, and also for the effective imposition of wage caps on their members. Currently centres exist in seven countries, in Brazil in Curitiba, in Czech Republic in Ostrava, in India in Hyderabad, Bangalore, Visakhapatnam, Mumbai, Gurgaon, Kolkata and Pune, in China in Shanghai, Guangzhou and Shenzhen, in Kuala Lumpur (Malaysia), Colombo (Kotte) (Sri Lanka) and Manila (Philippines). The Malta trial for a UK high value call centre has resulted in a growing operation in Malta. An option under consideration is reported to be a processing centre in Vietnam to access the French skills of the population and therefore cut costs in the bank’s French operation. On June 27, 2006, HSBC reported that a "small number" of customers had suffered from fraud totalling £233,000 after an employee at the Bangalore call centre supplied confidential customer information to fraudsters. HSBC Premier HSBC Premier is the group's premium financial services product. The exact benefits and qualification criteria vary depending on country, but typically require deposits and investments of at least $100,000, £50,000, or €100,000, or a mortgage of at least $500,000 or £250,000. Customers have a dedicated relationship manager, global 24 hour access to call centres and preferential rates. HSBC Bank International HSBC Bank International is the offshore banking arm of the HSBC Group, focusing on providing offshore solutions and cross border services to expatriates and migrants. It provides a full range of multi-currency personal banking services to a range of customer segments, including a full internet banking and telephone banking service. Sometimes referred to as "HSBC Offshore", the business also offers independent financial planning, and has representative offices all over the world, often working alongside local HSBC operations in those regions. HSBC Bank International originated from the business started by Midland Bank and is based in the Channel Islands with further operations on the Isle of Man. Its operations in the Channel Islands are centred around its registered headquarters on the seafront in St Helier, Jersey. Named 'HSBC House', the building comprises departments such as Premier, Global Funds & Investments, e-Business and a 24 hour 'Direct Banking Centre'. HSBCnet HSBCnet is a global service that caters to local business needs by offering specialised functionality for different regions worldwide. The system provides access to transaction banking functionality - ranging from payments and cash management to trade services features - as well as to research and analytical content from HSBC. It also includes foreign exchange and money markets trading functionality. The system is used widely by HSBC's high-end corporate and institutional clients served variously by the bank's global banking and markets, commercial banking and global transaction banking divisions. HSBCnet is also the brand under which HSBC markets its global e-commerce proposition to its corporate and institutional clients. HFC Bank (UK Operation) is a wholly owned subsidiary, with 135 High Street branches in the UK selling loans to the "sub-prime" market. During 2007 and 2008, has been trying to fend off a union recognition campaign by the Trade Union Unite. HSBC Direct HSBC Direct is an online direct banking operation which attracts customers through high-interest savings accounts and no service charges or minimum account balance requirements. It was first launched in the USA[50] in November 2005 and is now available in Canada, Taiwan and South Korea.
Brand and advertising The group announced in November 1999 that the HSBC brand and the hexagon symbol would be adopted as the unified brand in all the markets where HSBC operates, with the aim of enhancing recognition of the group and its values by customers, shareholders and staff throughout the world. Hexagon symbol This was originally adopted by The Hongkong and Shanghai Banking Corporation as its logo in 1983. It was developed from the bank’s house flag, a white rectangle divided diagonally to produce a red hourglass shape. Like many other Hong Kong company flags that originated in the 19th century, and because of its founder's nationality, the design was based on the cross of Saint Andrew. The logo was designed by graphic artist Henry Steiner. The 2004 Jaguar car, being driven by Mark Webber. Sponsorship Having sponsored the Jaguar Racing Formula One team since the days of Stewart Grand Prix, HSBC ended its relationship with the sport when Red Bull purchased Jaguar Racing from Ford. HSBC has now switched its focus to golf, taking title sponsorship of events such as the HSBC World Match Play Championship, HSBC Women's World Match Play Championship (now defunct), HSBC Champions and HSBC Women's Champions. In football HSBC sponsors French club AS Monaco and Mexican club C.F. Pachuca, and in rugby league, HSBC sponsors Telford Raiders in the Rugby League Conference. In Australia, HSBC sponsors the New South Wales Waratahs rugby team in the Super 14 rugby union competition, as well as the Hawthorn Football Club in the Australian Football League. In the United States, HSBC owns the naming rights to the home arena of the National Hockey League's Buffalo Sabres until 2026. HSBC’s other sponsorships are mainly in the area of education, health and the environment. In November 2006, HSBC announced a $5 million partnership with SOS Children as part of Future First. HSBC sponsors the Great Canadian Geography Challenge, which has had around 2 million participants in the past 12 years. Since 2001, HSBC has sponsored the Celebration of Light, an annual musical fireworks competition in Vancouver, British Columbia, Canada. In 2007 HSBC announced it would be a sponsor of the National Hockey League's Vancouver Canucks and Calgary Flames. HSBC has also sponsored a professional gaming team that was disbanded late 2007. HSBC will sponsor the British and Irish Lions on the 2009 tour of South Africa. HSBC is the official banking partner of the Wimbledon Tennis Championships, providing banking facilities on site and renaming the Road to Wimbledon junior event, as The HSBC Road to Wimbledon National 14 and Under Challenge. Customer groups HSBC splits its business into four distinct groups: Personal financial services HSBC provides more than 100 million customers worldwide with a full range of personal financial services, including current and savings accounts, mortgage loans, car financing, insurance, credit cards, loans, pensions and investments. Commercial banking HSBC provides financial services to small, medium-sized and middle-market enterprises. The group has almost 2.5 million of such customers, including sole proprietors, partnerships, clubs and associations, incorporated businesses and publicly quoted companies. Global banking and markets This customer group provides tailored financial services to corporate and institutional clients. Business lines comprise Global Banking, Global Markets, Global Asset Management, Global Research and Principal Investments. This division was previously known as Corporate, Investment Banking and Markets. Private banking Main article: HSBC Private Bank HSBC Private Bank is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank, together with the private banking activities of HSBC Trinkaus, known collectively as Group Private Banking, provides services to high net worth individuals and their families through 93 locations in some 42 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. As of December 2007, profits before tax were US$1,511 million and combined client assets under management were US$494 billion. In September 2008, HSBC announced that it would combine its two Swiss private banks under one brand name in 2009, with HSBC Guyerzeller and HSBC Private Bank to be merged into one legal entity, under the newly appointed CEO of HSBC Private Bank, Alexandre Zeller. Controversy Sudden withdrawal of graduate overdrafts In July 2007, HSBC suddenly withdrew its interest-free overdrafts for graduates. Students graduating that year discovered that they were to face unexpected bills of up to £140 a year. Students mobilised protests using the social networking website Facebook and in August HSBC reversed their policy, freezing overdraft charges to recent graduates and pledging to repay charges deducted in August while holding talks with the National Union of Students. Data loss In April 2008 HSBC confirmed the loss of unencrypted data disks containing life insurance policy details for 370,000 customers. Cultural insensitivity In 2008 HSBC were accused of 'cultural insensitivity' in an advertising campaign featuring an overweight white man dressed to look like a Sumo wrestler. The campaign upset members of Britain's Japanese community who claimed the man's skin tone was darkened and makeup was applied to narrow his eyes. HSBC denied making the model appear to be from a specific country or region but admitted makeup was applied and skin tone was tanned. Links to the arms trade In December 2008 the British anti-poverty charity War on Want released a report documenting the extent to which HSBC and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that HSBC holds shares in the global arms industry totally £450.6 million, and serves as principal banker for Meggitt, the UK's largest arms company. The report also details HSBC's dealings with known producers of cluster munitions and depleted uranium.
History Development of the Bank HSBC Main Building, located in Hong Kong. HSBC World Headquarters at 8 Canada Square in London, from the western end of West India Quay HSBC Holdings was established in 1990 and became the parent company to The Hongkong and Shanghai Banking Corporation in preparation for its purchase of Midland Bank and a change of domicile for the transfer of sovereignty of Hong Kong. Shares in HSBC Holdings, which gave HSBC a substantial presence in the UK, was completed in 1992. HSBC then moved the headquarters of HSBC Holdings from 1 Queens Road Central, Hong Kong to 10 Lower Thames Street, London in 1993. Major acquisitions in South America started with the purchase of Banco Bamerindus of Brazil for $1bn in March 1997 and the acquisition of Roberts SA de Inversiones of Argentina for $600m in May 1997. In May 1999 HSBC embarked on a major acquisition in the United States with the purchase of Republic National Bank of New York for $10.3bn. Expansion into Continental Europe took place in April 2000 with the acquisition of Crédit Commercial de France, a large French bank for £6.6bn. In July 2001 HSBC bought Demirbank, an insolvent Turkish bank. Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's largest retail bank for $1.1bn. The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in April 2003. Then in September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m. A terrorist attack took place in November 2003: a bomb blast in Istanbul damaged the bank’s head office in Turkey, causing several deaths and hundreds of injuries. In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai. In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for £763m in December 2004. Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August and 70.1% of Dar Es Salaam Investment Bank of Iraq in October. In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m. In December 2007 HSBC acquired The Chinese Bank in Taiwan. In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm. Role in subprime crisis In November 2002 HSBC expanded in the United States, spending £9bn (US$15.5bn) to acquire Household Finance Corporation (HFC), a US credit card issuer and subprime lender. In a 2003 cover story, The Banker noted "when banking historians look back, they may conclude that [it] was the deal of the first decade of the 21st century". Under the new name of HSBC Finance, the division was the second largest subprime lender in the US. The business indeed turned sour, costing HSBC some US$62bn[citation needed]. In March 2009, HSBC announced that it would shut down the branch network of its HSBC Finance arm in the U.S., leading to nearly 6,000 job losses, and leaving only the credit card business to continue operating. Chairman Stephen Green admitted that "it’s an acquisition we wish we hadn’t done with the benefit of hindsight"; analyst Colin Morton said, "the takeover was an absolute disaster". Although it was at the centre of the subprime storm, the wider group has weathered the economic crisis better than other global banks. According to Bloomberg, "HSBC is one of world’s strongest banks by some measures." When HM Treasury required all UK banks to increase their capital in October 2007, the group transferred £750 million to London within hours, and announced that it had just lent £4 billion to other UK banks. In March 2009, it announced that it had made US$9.3bn of profit in 2008 and announced a £12.5bn (US$17.7bn; HK$138bn) rights issue to enable it to buy other banks that were struggling to survive. However, uncertainty over the rights' issue's implications for institutional investors caused volatility in the Hong Kong stock market: on 9 March 2009 HSBC's share price fell 24.14%, with 12 million shares sold in the last few seconds of trading. Operations Corporate profile In February 2008, HSBC was named the world's most valuable banking brand by The Banker magazine. Not known for marked fluctuations in securities exchanges around the world relative to its rivals, HSBC is more well known in banking circles for its conservative and risk-averse approach in its business operations - a company tradition going back to the 19th century.In its technical management, however, HSBC has recently suffered a series of headline-making incidents in which some customer data were allegedly leaked or simply went missing. Although the consequences turned out to be small, the embarrassing effect on the group's image did not go unnoticed.
As of April 2, 2008, according to Forbes magazine, HSBC was the fourth largest bank in the world in terms of assets ($2,348.98 billion), the second largest in terms of sales ($146.50 billion), the largest in terms of market value ($180.81 billion). It was also the most profitable bank in the world with $19.13 billion in net income in 2007 (compared to Citigroup's $3.62 billion and Bank of America's $14.98 billion in the same period). HSBC is by far the largest bank both in the United Kingdom and in Hong Kong and prints most of Hong Kong's local currency in its own name. Since the end of 2005, HSBC has been the largest banking group in the world by Tier 1 capital. The HSBC Group has a significant presence in each of the world's major financial markets, with the Americas, Asia Pacific and Europe each representing around one third of the business. With 9,500 offices in 86 countries, 210,000 shareholders, 330,000 staff and 128 million customers worldwide, HSBC arguably has the most international presence among the world's multinational banking giants. The HSBC Group operates as a number of local banks around the world. Outlined below are countries which, in 2007, generated the top 20 profit before tax figures, with the addition of the United States as specific issues exclude that country from the top 20 for 2007.For details of other group companies see Category:HSBC. Americas HSBC Bank Argentina SA has around 150 branches throughout Argentina providing a full range of banking and financial products and services to over 1.2 million customers. HSBC acquired The Bank of Bermuda Limited in February 2004 for US$1.3bn. Founded in 1889, Bank of Bermuda is a leading provider of fund administration, trust, custody, asset management and banking services. Since the acquisition the group has focused its global efforts in some areas of these services on the island. HSBC Bank Brasil SA is HSBC’s largest presence in South America. HSBC is now among the ten largest banks in Brazil, with more than 1,700 branches and sub-branches in 550 Brazilian cities. Palacio Avenida: The headquarters of HSBC Bank Brasil, located in Curitiba. HSBC Bank Canada is the seventh largest bank in Canada, with offices in every province except for Prince Edward Island, and is the largest foreign-owned bank in the country. HSBC has a very strong presence in overseas Chinese communities, especially in Vancouver and Toronto[citation needed]. The bank's headquarters are located in Vancouver, British Columbia. HSBC Chile The HSBC Group first set up operations in Chile in 1981. Presently, HSBC Bank Chile is focusing on Global Banking and Commercial Bank businesses. Banco HSBC (Costa Rica) S.A. operates around 40 branches throughout the major cities and is the third largest bank in the country. In the summer of 2007 HSBC acquired Grupo Banistmo in Panama, the owner of Banco Banex in Costa Rica. HSBC El Salvador, SA is the third largest banking and financial service firm in the country. HSBC Honduras has 49 branches and is one of the largest banks in the country. HSBC acquired Banco Grupo El Ahorro Hondureño (BGA) when it acquired Banistmo in Panama. Banistmo had bought the bank in 2002, about a year after it was formed from the merger of Banco La Capitalizadora Hondureña (Bancahsa; est. 1948) and the Banco del Ahorro Hondureño. HSBC Mexico, SA is one of Mexico’s four largest banking and financial service companies, with 1,400 branches, 4,800 ATMs and 6 million customers. HSBC purchased Banco Internacional, SA known as Bital, in November 2002, rebranding it overnight in January 2004. HSBC Panama, SA HSBC's presence in Panama dates back to 1972. In 2000, HSBC Bank USA acquired Chase Manhattan's full-service, stand-alone bank business, which includes retail and wholesale capabilities. The acquisition included 11 full-service branches: seven branches in Panama City, two branches in Colon City, one branch in David and one branch in Chitre. At the time of the acquisition, HSBC operated in Panama as a full-service branch of HSBC Bank plc, with a strong franchise in corporate business as well as five retail branches. The acquisition of Chase Manhattan's business more than doubled HSBC's assets in Panama. Then in 2006, HSBC bought Grupo Banistmo, the largest financial services company in Central America, based in Panama for $1.8bn. HSBC established HSBC Paraguay SA when it acquired Lloyds TSB Bank Paraguay in 2007. Lloyds TSB had been in Paraguay since 1920 when the Bank of London and the River Plate established a branch in Asunción. HSBC Bank Peru S.A. In October 2006, HSBC began the first phase of its plan business in Peru, with the aim of meeting small, medium and large companies during the second half of 2007 is implemented and a network of Personal Banking initial agency in Lima that will expand gradually. HSBC Bank USA NA and HSBC Finance Corporation represent the group’s business in the US, which has been built up via the acquisition of Marine Midland (1980), Republic National Bank (1999), Household International (2003) and Metris Companies (2005) Solstice Capital Group (2006), among others. HSBC Bank USA, headquartered in Wilmington, Delaware (as of 2008), is a full service bank, with a strong branch network in New York State but also operating nationwide. HSBC Finance Corporation focuses on selected lines of consumer lending with a branch network across the US. Asia Pacific The HSBC Global Technology Centre in Pune, India develops software for the entire HSBC group. HSBC in Kolkata. HSBC Bank Australia Limited gained its banking licence in 1986. Today, the bank offers a full range of Personal and Commercial services via a network of branches as well as direct channels. HSBC Bangladesh opened its first branch in 1996 and now has 10 offices there. HSBC Bank (China) Company Limited and HSBC Rural Bank Company Limited HSBC established its Shanghai branch office on 3 April 1865 and has had a continuous presence in the city since then, except for a break during the Japanese Occupation. Until the economic reforms of the late 1970s, its activities were mainly in inward remittances and export bills, however its activities now span a wider range. HSBC has purchased stakes in various local firms, including 19% of Bank of Communications, 8% of Bank of Shanghai, 16.8% of Ping An Insurance and via its subsidiary Hang Seng Bank, 12.8% of Industrial Bank. In 1996, HSBC was one of the first foreign banks approved to conduct renminbi business in Shanghai. The bank opened a new office in Chengdu and received approval to open a branch in Pudong and upgrade its Dalian office to a branch. HSBC first opened for business in Hong Kong on 3 March 1865. It is one of three commercial banks that issue Hong Kong dollar banknotes in the Hong Kong SAR and has the largest share by value. The Hang Seng Index for stock prices in Hong Kong is named after the Hang Seng Bank Limited, which is a subsidiary of HSBC. The two banks are today first and second by market share in Hong Kong. In 1959 HSBC acquired The Mercantile Bank of India, London and China, established in October 1853 in Bombay. 1990. HSBC is now one of the fastest growing foreign banks in India, both in domestic banking and support operations for worldwide operations (see Group Service Centres). HSBC opened its first Indonesian office in Batavia in 1884 to serve the sugar trade. It then expanded its operation to Surabaya in 1896. Later in 1994 HSBC upgraded its Semarang agency, which had been operating since 1878, into a full branch. HSBC twice closed its operations in Indonesia. The first time was during World War II, though it immediately returned after the war. In the mid-1960s, the Indonesia government forced the bank to close again, but the bank received a new banking license in 1968. In October 2008, HSBC paid US$608 million to acquire 89% of Bank Ekonomi, which had 2,200 staff, 86 branches, and about US$1.8 billion in assets. The acquisition made HSBC the third largest bank in the country, and gave it a total of 190 branches in 24 cities. HSBC Bank Malaysia Berhad traces its history back to the opening of the first HSBC office in Penang in 1884. The bank later became an issuer of currency notes for the Malaysian government. In 1994, HSBC became the first foreign bank to incorporate locally, forming Hongkong Bank Malaysia Berhad (now HSBC Bank Malaysia Berhad). The bank today provides a full range of personal and commercial financial services. HSBC Holdings plc in London UK is set to shift a significant number of jobs from Britain to its new operational headquarters in Cyberjaya, Malaysia. HSBC operates a call centre in Cyberjaya,Malaysia, a cybercity in Malaysia. HSBC started its operations in Pakistan in 1982. Since then it has expanded to all major cities of Pakistan and operates as a full service bank. It currently has 12 offices: four in Karachi, two in Lahore, two in Islamabad and one each in Rawalpindi, Sialkot, Multan and Faisalabad. The head-office is based in Karachi. The HSBC Group is represented in the Philippines through The Hongkong and Shanghai Banking Corporation Limited, and its subsidiary, the locally-incorporated HSBC Savings Bank (Philippines) Inc. HSBC opened its first branch in the Philippines in Binondo in November 1875. In 1883, a second branch was opened in Iloilo to serve the growing sugar industry. In 1971, the branch in Binondo was moved to Makati City. Ten years later, in 1981, the Iloilo branch was closed and a new branch in Ortigas Center, Pasig City, was opened. HSBC operates as a full service bank with its headquarters in Collyer Quay. It is an approved Primary Dealer in the Singapore Government Securities Market and an Approved Bond Intermediary, with over a hundred staff operating one of the largest integrated dealing rooms in Singapore. HSBC (Sri Lanka) traces its presence there to 1 July 1892. In 1882, HSBC appointed Delmege Reid and Co., which became Delmege Forsyth and Co. Ltd., as its agent in Colombo. In 1892, after the collapse of the New Oriental Banking Corporation HSBC saw an opportunity and established a branch. HSBC (Thailand) initially opened a branch in Bangkok in 1888, becoming the first commercial bank in the country. In 1889 HSBC issued the first banknotes in Thailand. Later, in 1905, HSBC joined with France's Banque de l'Indochine to issue the first foreign loan to the Thai government for its railroad construction project. HSBC Bank (Vietnam) Company Limited HSBC has had a long history in Vietnam, having opened a branch in Saigon in 1870. The branch operated for over 100 years, until its closure in 1975. In 1992, the bank opened representative offices in Ho Chi Minh City (HCMC) and Hanoi; HSBC upgraded the office in HCMC to a full-service branch in August 1995. Europe HSBC Bank Armenia cjsc is a 70 per cent indirectly owned subsidiary of HSBC Bank. Armenian business interests own the remaining equity. The bank began operations as Midland Armenia Bank in Yerevan in March 1996 and was the first international bank to open in Armenia. It is one of the leading banks in the foreign exchange market. HSBC opened its Prague Branch in May 1997. HSBC SA operates around 380 branches in France since the takeover of Credit Commercial de France, primarily operating under the HSBC brand. HSBC France is now the HSBC Group’s lead bank in the Eurozone, focusing on certain capital market products for a global audience, and high net worth and international business in France. HSBC Trinkaus & Burkhardt AG traces its origins to 1785. It has operations in private, commercial and investment banking and asset management. HSBC Hellas HSBC has been operating in Greece since 1981. In 2001, HSBC acquired Barclay's operations in Greece, which amounted to 13 branches and included fund management. HSBC Bank Malta plc is one of the largest banks in Malta. It is a listed company but its majority shareholder is the HSBC Group. HSBC Bank Malta traces its origins back to the founding of the Anglo-Egyptian Bank in 1864, which makes it the second oldest bank in Malta. HSBC (Spain) dates back to the establishment of a branch in Madrid in 1982. HSBC Private Bank is the Swiss operating subsidiaries of the group's Private Banking business, with 12 locations in the country. HSBC Bank AS is now the fifth largest private bank in Turkey, having expanded through internal financing and via acquisition since entering the market in 1990. The bank has a network of around 190 branches, offering products and services to corporate, commercial and personal customers, both under the HSBC brand as well as the Advantage brand. HSBC Bank plc is one of the "Big Five" high street banks in the UK, maintaining a large network of branches in England and Wales, with a smaller presence in Scotland and Northern Ireland. It acquired this presence in 1992 with the acquisition of Midland Bank plc. It also operates the previously Midland-owned telephone and internet bank First Direct, the consumer lending brand Beneficial Finance, and the financial services divisions of Marks & Spencer and the John Lewis Partnership. In Russia, HSBC operates through OOO HSBC Bank,which is the 103rd largest bank in the country and is an affiliate of HSBC Bank plc. Middle East and Africa HSBC Algeria commenced operating in 2008, after HSBC received permission in 2007 from the Bank of Algeria to establish a subsidiary. The branch has a capital of 2,5 billion dinars, or about 25 million euros, which it will increase to 3,6 billion dinars (36 million euros) within three years. It is headed by an Algerian, Rachid Sekak, the former head of foreign debt at the Bank of Algeria, who had earlier came from HSBC's operations in Paris. HSBC Bank Egypt SAE traces its origins to a joint-venture bank established in 1982. In 2001 HSBC was able to increase its ownership stake from 40% to 94.5%, after which it rebranded the bank as part of the HSBC group. In the Hashemite Kingdom of Jordan, the HSBC Group is represented by HSBC Bank Middle East Limited, the largest and most widely represented international bank in the Middle East. HSBC's presence dates back to its acquisition in 1959 of British Bank of the Middle East, which had been present in Jordan since 1889. HSBC dates its presence in Lebanon to 1949. HSBC has branches located in St. Georges Bay, Dora, Ras Beirut, Verdun and Zouk. SABB (The Saudi British Bank) In Saudi Arabia HSBC is represented by The Saudi British Bank, which is a 40% owned affiliate. HSBC is also a joint venture partner in HSBC Saudi Arabia Limited, the Kingdom’s first full service independent investment bank. HSBC Bank Middle East Limited The United Arab Emirates represents a key part of HSBC Bank Middle East's business, with 16 branches and the firm's head office located here. HSBC established an indirect presence in Sub-Saharan Africa in 1981 through Equator Bank, a joint venture with Nedbank and the bank's executives, and entered the South African market in 1995 with a representative office. In 2003, HSBC converted the reop office in Johannesburg to a branch. The Johannesburg branch is now the regional management office for all of HSBC's Sub-Saharan Africa activities and offers corporate banking, transaction banking, investment banking, treasury and capital markets services to HSBC's major multinational clients, large local corporate and financial institutions, and governments. HSBC Securities (South Africa) offers equities services. Global product lines and programmes Group Service Centres As a cost saving measure HSBC is offshoring processing work to lower cost economies in order to reduce the cost of providing services in developed countries. These locations take on work such as data processing and customer service, but also internal software engineering at Pune, Hyderabad (India),Visakahpatnam (India),Kolkota(India) Guangzhou (China) and Curitiba (Brazil). Chief Operating Officer Alan Jebson said in March 2005 that he would be very surprised if fewer than 25,000 people were working in the centres over the next three years: “I don’t have a precise target but I would be surprised if we had less than 15 (global service centres) in three years’ time.” He went on to say that each centre cost the bank from $20m to $30m to set up, but that for every job moved the bank saves about $20,000 (£10,400). Trade unions, particularly in the US and UK, blame these centres for job losses in developed countries, and also for the effective imposition of wage caps on their members. Currently centres exist in seven countries, in Brazil in Curitiba, in Czech Republic in Ostrava, in India in Hyderabad, Bangalore, Visakhapatnam, Mumbai, Gurgaon, Kolkata and Pune, in China in Shanghai, Guangzhou and Shenzhen, in Kuala Lumpur (Malaysia), Colombo (Kotte) (Sri Lanka) and Manila (Philippines). The Malta trial for a UK high value call centre has resulted in a growing operation in Malta. An option under consideration is reported to be a processing centre in Vietnam to access the French skills of the population and therefore cut costs in the bank’s French operation. On June 27, 2006, HSBC reported that a "small number" of customers had suffered from fraud totalling £233,000 after an employee at the Bangalore call centre supplied confidential customer information to fraudsters. HSBC Premier HSBC Premier is the group's premium financial services product. The exact benefits and qualification criteria vary depending on country, but typically require deposits and investments of at least $100,000, £50,000, or €100,000, or a mortgage of at least $500,000 or £250,000. Customers have a dedicated relationship manager, global 24 hour access to call centres and preferential rates. HSBC Bank International HSBC Bank International is the offshore banking arm of the HSBC Group, focusing on providing offshore solutions and cross border services to expatriates and migrants. It provides a full range of multi-currency personal banking services to a range of customer segments, including a full internet banking and telephone banking service. Sometimes referred to as "HSBC Offshore", the business also offers independent financial planning, and has representative offices all over the world, often working alongside local HSBC operations in those regions. HSBC Bank International originated from the business started by Midland Bank and is based in the Channel Islands with further operations on the Isle of Man. Its operations in the Channel Islands are centred around its registered headquarters on the seafront in St Helier, Jersey. Named 'HSBC House', the building comprises departments such as Premier, Global Funds & Investments, e-Business and a 24 hour 'Direct Banking Centre'. HSBCnet HSBCnet is a global service that caters to local business needs by offering specialised functionality for different regions worldwide. The system provides access to transaction banking functionality - ranging from payments and cash management to trade services features - as well as to research and analytical content from HSBC. It also includes foreign exchange and money markets trading functionality. The system is used widely by HSBC's high-end corporate and institutional clients served variously by the bank's global banking and markets, commercial banking and global transaction banking divisions. HSBCnet is also the brand under which HSBC markets its global e-commerce proposition to its corporate and institutional clients. HFC Bank (UK Operation) is a wholly owned subsidiary, with 135 High Street branches in the UK selling loans to the "sub-prime" market. During 2007 and 2008, has been trying to fend off a union recognition campaign by the Trade Union Unite. HSBC Direct HSBC Direct is an online direct banking operation which attracts customers through high-interest savings accounts and no service charges or minimum account balance requirements. It was first launched in the USA[50] in November 2005 and is now available in Canada, Taiwan and South Korea.
Brand and advertising The group announced in November 1999 that the HSBC brand and the hexagon symbol would be adopted as the unified brand in all the markets where HSBC operates, with the aim of enhancing recognition of the group and its values by customers, shareholders and staff throughout the world. Hexagon symbol This was originally adopted by The Hongkong and Shanghai Banking Corporation as its logo in 1983. It was developed from the bank’s house flag, a white rectangle divided diagonally to produce a red hourglass shape. Like many other Hong Kong company flags that originated in the 19th century, and because of its founder's nationality, the design was based on the cross of Saint Andrew. The logo was designed by graphic artist Henry Steiner. The 2004 Jaguar car, being driven by Mark Webber. Sponsorship Having sponsored the Jaguar Racing Formula One team since the days of Stewart Grand Prix, HSBC ended its relationship with the sport when Red Bull purchased Jaguar Racing from Ford. HSBC has now switched its focus to golf, taking title sponsorship of events such as the HSBC World Match Play Championship, HSBC Women's World Match Play Championship (now defunct), HSBC Champions and HSBC Women's Champions. In football HSBC sponsors French club AS Monaco and Mexican club C.F. Pachuca, and in rugby league, HSBC sponsors Telford Raiders in the Rugby League Conference. In Australia, HSBC sponsors the New South Wales Waratahs rugby team in the Super 14 rugby union competition, as well as the Hawthorn Football Club in the Australian Football League. In the United States, HSBC owns the naming rights to the home arena of the National Hockey League's Buffalo Sabres until 2026. HSBC’s other sponsorships are mainly in the area of education, health and the environment. In November 2006, HSBC announced a $5 million partnership with SOS Children as part of Future First. HSBC sponsors the Great Canadian Geography Challenge, which has had around 2 million participants in the past 12 years. Since 2001, HSBC has sponsored the Celebration of Light, an annual musical fireworks competition in Vancouver, British Columbia, Canada. In 2007 HSBC announced it would be a sponsor of the National Hockey League's Vancouver Canucks and Calgary Flames. HSBC has also sponsored a professional gaming team that was disbanded late 2007. HSBC will sponsor the British and Irish Lions on the 2009 tour of South Africa. HSBC is the official banking partner of the Wimbledon Tennis Championships, providing banking facilities on site and renaming the Road to Wimbledon junior event, as The HSBC Road to Wimbledon National 14 and Under Challenge. Customer groups HSBC splits its business into four distinct groups: Personal financial services HSBC provides more than 100 million customers worldwide with a full range of personal financial services, including current and savings accounts, mortgage loans, car financing, insurance, credit cards, loans, pensions and investments. Commercial banking HSBC provides financial services to small, medium-sized and middle-market enterprises. The group has almost 2.5 million of such customers, including sole proprietors, partnerships, clubs and associations, incorporated businesses and publicly quoted companies. Global banking and markets This customer group provides tailored financial services to corporate and institutional clients. Business lines comprise Global Banking, Global Markets, Global Asset Management, Global Research and Principal Investments. This division was previously known as Corporate, Investment Banking and Markets. Private banking Main article: HSBC Private Bank HSBC Private Bank is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank, together with the private banking activities of HSBC Trinkaus, known collectively as Group Private Banking, provides services to high net worth individuals and their families through 93 locations in some 42 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. As of December 2007, profits before tax were US$1,511 million and combined client assets under management were US$494 billion. In September 2008, HSBC announced that it would combine its two Swiss private banks under one brand name in 2009, with HSBC Guyerzeller and HSBC Private Bank to be merged into one legal entity, under the newly appointed CEO of HSBC Private Bank, Alexandre Zeller. Controversy Sudden withdrawal of graduate overdrafts In July 2007, HSBC suddenly withdrew its interest-free overdrafts for graduates. Students graduating that year discovered that they were to face unexpected bills of up to £140 a year. Students mobilised protests using the social networking website Facebook and in August HSBC reversed their policy, freezing overdraft charges to recent graduates and pledging to repay charges deducted in August while holding talks with the National Union of Students. Data loss In April 2008 HSBC confirmed the loss of unencrypted data disks containing life insurance policy details for 370,000 customers. Cultural insensitivity In 2008 HSBC were accused of 'cultural insensitivity' in an advertising campaign featuring an overweight white man dressed to look like a Sumo wrestler. The campaign upset members of Britain's Japanese community who claimed the man's skin tone was darkened and makeup was applied to narrow his eyes. HSBC denied making the model appear to be from a specific country or region but admitted makeup was applied and skin tone was tanned. Links to the arms trade In December 2008 the British anti-poverty charity War on Want released a report documenting the extent to which HSBC and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that HSBC holds shares in the global arms industry totally £450.6 million, and serves as principal banker for Meggitt, the UK's largest arms company. The report also details HSBC's dealings with known producers of cluster munitions and depleted uranium.
Citibank
Citibank is a major international bank, founded in 1812 as the City Bank of New York, later First National City Bank of New York. Citibank is now the consumer banking arm of financial services giant Citigroup, one of the largest companies in the world. As of March 2007, it is the largest bank in the United States by holdings. Citibank has operations in more than 100 countries and territories around the world. More than half of its 1,400 offices are in the United States, mostly in the New York City, Chicago, Miami, and Washington, D.C. metropolitan areas, as well as in California. In addition to the standard banking transactions, Citibank offers insurance, credit card and investment products. Their online services division is among the most successful in the field, claiming about 15 million users. As a result of the global financial crisis and huge losses in the value of its subprime mortgage assets, Citibank was rescued by the U.S. government under plans agreed for Citigroup. On November 23, 2008, in addition to initial aid of $25 billion, a further $25 billion was invested in the corporation together with guarantees for risky assets amounting to $306 billion.
History Early history Founded in 1812 as the City Bank of New York by a group of New York merchants, the bank's first head was Samuel Osgood, who had been the United States Postmaster General. Subsequently, ownership and management of the bank was taken over by Moses Taylor, a protégé of John Jacob Astor and one of the giants of the business world in the 19th century. During Taylor's ascendancy, the bank functioned largely as a treasury and finance center for Taylor's own extensive business empire. In 1863 the bank joined the U.S.'s new national banking system and became The National City Bank of New York. By 1868, it was considered one of the largest banks in the United States, and in 1897, it became the first major U.S. bank to establish a foreign department. In 1896, it was the first contributor to the Federal Reserve Bank of New York. National City became the first U.S. national bank to open an overseas banking office when its branch in Buenos Aires, Argentina, was opened in 1914. Many of Citi's present international offices are older; offices in London, Shanghai, Calcutta and elsewhere were opened in 1901 and 1902 by the International Banking Corporation (IBC), a company chartered to conduct banking business outside the U.S., at that time an activity forbidden to U.S. national banks. In 1918, IBC became a wholly owned subsidiary and was subsequently merged into the bank. By 1919 the bank had become the first U.S. bank to have $ 1 billion in assets. In 1910, National City bought a significant share of Haiti's National Bank (Banque de la Republique d'Haiti) which functioned as the country's treasury and had a monopoly on note issue. After the American invasion of Haiti, it bought all of the capital stock of the Banque de la Republique. The bank became the target of criticism for what were considered to be monopolistic and unfair banking practices. It initially did not pay the Haitian government interest on surplus money that it deposited in the treasury, which was loaned out by City Bank in New York. After 1922, it began paying interest, but only at a rate of 2% compared to the 3.5% that it paid to similar depositors. Economist and Senator Paul Douglas estimated that this amounted to $1 million in lost interest at a time when Haiti's government revenues were less than $7 million. Charles E. Mitchell was elected president in 1921 and in 1929 was made chairman, a position he held until 1933. Under Mitchell the bank expanded rapidly and by 1930 had 100 branches in 23 countries outside the United States. In 1933 a Senate investigated Mitchell for his part in tens of millions dollars in losses, excessive pay, and tax avoidance. Senator Carter Glass said of him, "Mitchell more than any 50 men is responsible for this stock crash." On 24 December, 1927, its headquarters in Buenos Aires, Argentina, were blown up by the Italian anarchist Severino Di Giovanni, in the frame of the international campaign supporting Sacco and Vanzetti. In 1952, James Stillman Rockefeller was elected president and then chairman in 1959, serving until 1967. Stillman was a direct descendant of the Rockefeller family through the William Rockefeller (the brother of John D.) branch; in 1960 his second cousin, David Rockefeller, became president of Chase Manhattan Bank, National City's long-time New York rival for dominance in the banking industry in America. Citibank Following its merger with the First National Bank, the bank changed its name to The First National City Bank of New York in 1935, then shortened it to First National City Bank in 1952. The company organically entered the leasing and credit card sectors, and its introduction of USD certificates of deposit in London marked the first new negotiable instrument in market since 1888. Later to become part of MasterCard, the bank introduced its First National City Charge Service credit card - popularly known as the "Everything Card" - in 1967. During the mid-1970s, under the leadership of CEO Walter Wriston, First National City Bank (and its holding company First National City Corporation) was renamed Citibank, N.A. (and Citicorp, respectively). By that time, the bank had created its own "one-bank holding company" and had become a wholly owned subsidiary of that company, Citicorp (all shareholders of the bank had become shareholders of the new corporation, which became the bank's sole owner). The name change also helped to avoid confusion in Ohio with Cleveland-based National City Bank, though the two would never have any significant overlapping areas except for Citi credit cards being issued in the latter National City territory. (In addition, at the time of the name change to Citicorp, National City of Ohio was mostly a Cleveland-area bank and had not gone on its acquisition spree that it would later go on in the 1990s and 2000's.) Any possible name confusion had Citi not changed its name from National City eventually became completely moot when PNC Financial Services acquired the National City of Ohio in 2008 as a result of the subprime mortgage crisis. Automated banking card Shortly afterward, the bank launched the Citicard, which allowed customers to perform all transactions without a passbook. Branches also had terminals with simple one line displays that allowed customers to get basic account information without a bank teller. When automatic teller machines were later introduced, customers could use their existing Citicard. Credit card business In the 1960s the bank entered into the credit card business. In 1965, First National City Bank bought Carte Blanche from Hilton Hotels. However after three years, the bank (under pressure from the U.S. government) was forced to sell this division. By 1968, the company created its own credit card. The card, known as "The Everything Card," was promoted as a kind of East Coast version of the BankAmericard. By 1969, First National City Bank decided that the Everything Card was too costly to promote as an independent brand and joined Master Charge (now MasterCard). Citibank unsuccessfully tried again in 1977–1987 to create a separate credit card brand, the Choice Card. John S. Reed was elected CEO in 1984, and Citi became a founding member of the CHAPS clearing house in London. Under his leadership, the next 14 years would see Citibank become the largest bank in the United States, the largest issuer of credit cards and charge cards in the world, and expand its global reach to over 90 countries. As the bank's expansion continued, the Narre Warren-Caroline Springs credit card company was purchased in 1981. In 1981, Citibank chartered a South Dakota subsidiary to take advantage of new laws that raised the state's maximum permissible interest rate on loans to 25 percent (then the highest in the nation). In many other states, usury laws prevented banks from charging interest that aligned with the extremely high costs of lending money in the late 1970s and early 1980s, making consumer lending unprofitable. Automatic teller machines Citibank was one of the first U.S. banks to introduce automatic teller machines in the 1970s, in order to give 24-hour access to accounts. Customers could use their existing Citicard in this machine to withdraw cash and make deposits, and were already accustomed to using a machine with a card to get information that previously required a teller. In April 2006, Citibank struck a deal with 7-Eleven to put its automated teller machine (ATMs) in more than 5,500 convenience stores in the U.S. In the same month, it also announced it would sell all of its Buffalo and Rochester New York branches and accounts to M&T Bank.
Nationwide expansion Citibank's major presence in California is fairly recent. The bank had only a handful of branches in that state before acquiring the assets of California Federal Bank in 2002 with Citicorp's purchase of Golden State Bancorp. In 2001, Citibank settled a $45 million class action lawsuit for improperly assessing late fees. Following this Citibank lobbied the United States Congress to pass legislation that would limit class action lawsuits to $5 million unless they were initiated on a federal level. Some consumer advocate websites report that Citibank is still improperly assessing late fees. In August 2004, Citibank entered the Texas market with the purchase of First American Bank of Bryan, Texas. The deal established Citi's retail banking presence in Texas, giving Citibank over 100 branches, $3.5 billion in assets and approximately 120,000 new customers in the state. First American Bank was renamed Citibank Texas after the take-over was completed on March 31, 2005. In 2008, Citibank was crowned Deal of the Year - Securitisation Deal of the Year at the 2008 ALB Japan Law Awards
Citi Field It was announced on November 13, 2006 that Citibank would be the corporate sponsor of the new stadium for the New York Mets. The stadium, Citi Field, opened in 2009.
Recent losses and cost cutting measures Citi reported losing $8–11 billion several days after Merrill Lynch announced that it too has been losing billions from the subprime mortgage crisis in the US. On April 11, 2007, the parent Citi announced the following staff cuts and relocations. On 4 November, 2007, Charles "Chuck" Prince quit as the chairman and chief executive of Citigroup, following crisis meetings with the board in New York in the wake of billions of dollars in losses related to subprime lending. Former United States Secretary of the Treasury Robert Rubin has been asked to replace ex-CEO Charles Prince to manage the losses Citi has amassed over the years of being over-exposed to subprime lending during the 2002–2007 surge in the real estate industry. In August 2008, after a three year investigation by California's Attorney General Citibank was ordered to repay the $14 million (close to $18 million including interest and penalties) that was removed from 53,000 customers accounts over an eleven year period from 1992-2003. The money was taken under a computerized "account sweeping program" where any positive balances from over-payments or double payments were removed without notice to the customers. On November 23, 2008, Citigroup was forced to seek federal financing to avoid a collapse, in a way similar to its colleagues Bear Stearns and AIG. The US government provided $25 billion and guarantees to risky assets to Citigroup in exchange for stock. This was the latest bailout in a string of bailouts that began with bear stearns and peaked with the collapse of the GSE's, Lehman, AIG and the start of TARP. On January 16, 2009 Citigroup announced that it was splitting into two companies. Citicorp will continue with the traditional banking business while Citi Holdings Inc. will own the more risky investments, some of which will be sold to strengthen the balance sheet of the core business; Citicorp. The idea behind splitting into two companies is so Citigroup can dump "the dead weight" on Citicorp, allowing the prime assets of Citi to operate away from that of the toxic assets.
International subsidiaries Citibank Australia Citibank Bangladesh Citibank (Hong Kong) Citibank Japan Citibank Singapore Citibusiness Singapore Citibank Singapore IPB Citibank Taiwan Citibank Pakistan Citibank Thailand Citibank Malaysia Citibank Philippines Citibank Argentina Citibank Brazil Citibank Chile Citibank Peru Citibank Korea Citibank Russia Citibank India Citibank Indonesia Citibank (China)
Deutch bank
Deutsche Bank AG (literally "German Bank"; pronounced; ISIN: DE0005140008, NYSE: DB) is an international Universal bank with its headquarters in Frankfurt, Germany. The bank employs more than 81,000 people in 76 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets. Deutsche Bank has offices in major financial centers, such as London, Moscow, New York, Singapore, Sydney, Hong Kong and Tokyo. Furthermore, the bank is investing in expanding markets, such as the Middle East, Latin America, Central & Eastern Europe and Asia Pacific. The bank offers financial products and services for corporate and institutional clients along with private and business clients. Services include sales, trading, and origination of debt and equity; mergers and acquisitions ((M&A); risk management products, such as derivatives, corporate finance, wealth management, retail banking, fund management, and transaction banking. Deutsche Bank’s Chief Executive Officer and Chairman of the Group Executive Committee, since 2002, is Josef Ackermann. Deutsche Bank is listed on both the Frankfurt (FWB) and New York stock exchanges (NYSE).
History This section does not cite any references or sources. Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed. (April 2008) Deutsche Bank was founded in Germany in January 1870 as a specialist bank for foreign trade in Berlin. Its first branches, inaugurated in 1871 and 1872 were opened in Bremen, Hamburg, Frankfurt, Leipzig and Dresden. The Bank’s first foray overseas came shortly afterwards, in Shanghai (1872) and London (1873). Already, at this early stage, the bank was looking further afield, making investments in North and South America, Asia, and Turkey. Furthermore, major projects in the early years of the bank included the Northern Pacific Railroad in the US and the Baghdad Railway (1888). In Germany, the bank was instrumental in the financing bond offerings of steel company Krupp (1885) and introduced the chemical company and Zyklon B manufacturer Bayer to the Berlin stock market. The bank merged with other local banks in 1929 to create Deutsche Bank und DiscontoGesellschaft, at that point the biggest ever merger in German banking history. In 1937, the company name changed back to Deutsche Bank. After Adolf Hitler came to power, instituting the Third Reich, Deutsche Bank dismissed its three Jewish board members in 1933. In subsequent years Deutsche Bank took part in the aryanization of Jewish-owned businesses: according to its own historians, the bank was involved in 363 such confiscations by November 1938. During the war, Deutsche Bank incorporated other banks that fell into German hands during the occupation of Eastern Europe. Deutsche provided banking facilities for the Gestapo and loaned the funds used to build the Auschwitz camp and the nearby IG Farben facilities. Deutsche Bank revealed its involvement in Auschwitz in February 1999. In December 1999 Deutsche, along with other major German companies, contributed to a $5.2 billion compensation fund following lawsuits brought by Holocaust survivors. The history of Deutsche Bank during the Second World War has been documented by independent historians commissioned by the Bank. During World War II, Deutsche Bank became responsible for managing the Bohemian Union Bank in Prague, with branches in the Protectorate and in Slovakia, the Bankverein in Yugoslavia (which has now been divided into two financial corporations, one in Serbia and one in Croatia), the Albert de Barry Bank in Amsterdam, the National Bank of Greece in Athens, the Oesterreichische Creditanstalt-Bankverein in Austria and Hungary, the Deutsch-Bulgarische Kreditbank in Bulgaria, and Banca Commercial Romana in Bucharest. It also maintained a branch in Istanbul, Turkey. Following Germany's defeat in World War II, the Allied authorities, in 1948, ordered Deutsche Bank's break-up into ten regional banks. These 10 regional banks were later consolidated into three major banks in 1952: Norddeutsche Bank AG; Süddeutsche Bank AG; and Rheinisch-Westfälische Bank AG. In 1957, these three banks merged to form Deutsche Bank AG with its headquarters in Frankfurt. Two years later, the bank entered retail banking by introducing small personal loans. In the 1970s, the bank pushed ahead with international expansion, opening new offices in new locations, such as Milan (1977), Moscow, London, Paris and Tokyo. In the 1980s, this continued when the bank paid US$603 million in 1986 to acquire Banca d’America e d’Italia, the Italian subsidiary that Bank of America had established in 1922 when it acquired Banca dell'Italia Meridionale. The acquisition represented the first time Deutsche Bank had acquired a sizeable branch network in another European country. In 1989, the first steps towards creating a significant investment-banking presence were taken with the acquisition of Morgan Grenfell, a UK-based investment bank. By the mid-1990s, the build up of a capital-markets operation had got under way with the arrival of a number of high-profile figures from major competitors. Ten years after the acquisition of Morgan Grenfell, the U.S. firm Bankers Trust was added. Deutsche continued to build up its presence in Italy with the acquisition in 1993 of Banca Popolare di Lecco from Banca Popolare di Novara for about US$476 million. In 2001, Deutsche Bank was listed on the New York Stock Exchange (NYSE). The following year, Deutsche Bank strengthened its U.S. presence when it purchased Scudder Investments. Meanwhile, in Europe, Deutsche Bank increased its private-banking business by acquiring Rued Blass & Cie (2002) and the Russian investment bank United Financial Group (2006). In Germany, further acquisitions of Noris Bank and Berliner Bank strengthened Deutsche Bank’s retail offering in its home market. This series of acquisitions was closely aligned with the bank’s strategy of bolt-on acquisitions in preference to so-called “transformational” mergers. These formed part of an overall growth strategy that also targeted a sustainable 25% return on equity, something the bank achieved in 2005. At the 2008 ALB SE Asia Law Awards, Deutsche Bank was crowned: Deal of the Year - Debt Market Deal of the Year In-House of the Year - Investment Bank In-house Team of the Year At the 2008 ALB China Law Awards, Deutsche Bank was crowned: Deal of the Year - IT/Telecommunications Deal of the Year Deal of the Year - China Deal of the Year In 2008 Deutsche Bank was awarded at the 2008 ALB Hong Kong Law Awards[8] as the: In-House of the Year - Banking & Financial Services In-House Team of the Year In-House of the Year - Investment Bank In-House Team of the Year Deal of the Year - Equity Market Deal of the Year Deal of the Year - Project Finance Deal of the Year Performance Year 2008 2007 2006 2005 2004 2003 Net Income €-3.9bn €6.5bn €6.1bn €3.5bn €2.5bn €1.4bn Revenues €13.5bn €30.7bn €28.5bn €25.6bn €21.9bn €21.3bn Return on Equity -29% 29% 30% 26% 16% 1% Dividend 0.5 4.5 4.0 2.5 1.7 1.5 Deutsche Bank has been transformed over the past five years, moving from a German-centric organisation that was renowned for its retail and commercial presence to a global investment bank that is less reliant on its traditional markets for its profitability. The bank has been widely recognised for its progress and was named IFR Bank of the Year twice in a three year period, in 2003 and 2005. For the 2008 financial year, Deutsche Bank reported its first annual loss in five decades.[citation needed], despite receiving billions of dollars from its insurance arrangements with AIG, including $11.8bn from funds provided by the United States taxpayers to bail out AIG. Management Structure Until recently, there was no CEO at Deutsche Bank. The board was represented by a “speaker of the board.” Today, Deutsche Bank has a Management Board whose members are: Josef Ackermann (Chairman and CEO); Hugo Bänziger (Chief Risk Officer); Michael Cohrs (Global Banking); Anshu Jain (Global Markets); Jürgen Fitschen (Regional Management); Rainer Neske (Private & Business Clients); Hermann-Josef Lamberti (Chief Operating Officer) and Stefan Krause. The Group Executive Committee is the Management Board plus the heads of the bank’s other business areas, namely: Kevin Parker (Asset Management); and Pierre de Weck (Private Wealth Management). The Supervisory Board of the bank is chaired by Clemens Börsig. Business Structure Deutsche Bank’s mission statement is: “We compete to be the leading global provider of financial solutions for demanding clients creating exceptional value for our shareholders and people.” The bank’s business model rests on two pillars: the Corporate & Investment Bank (CIB) and Private Clients & Asset Management. Deutsche Bank owns Abbey Life, a large UK pension and assurance company. The company acquired this closed life book in June 2007. Abbey Life has no functioning website, and its purported website http://www.abbeylife.co.uk/ has not functioned for many months. Abbey Life's internet activities can be confused with www.abbey.com, an unrelated functioning website owned by Abbey, a UK banking subsidiary of Banco di Santander. Abbey Life pension fund holders have little of the up to date information on the funds and their management needed to protect their interests under current conditions. Abbey Life sold many pension policies in the 1980s, but are now closed to new business. Firms such as Standard Life and Norwich Union scrapped exit penalties for all policies - old and new - in 2001. Those with Abbey Life pensions are locked into poorly performing funds with very high management charges[13], and high exit costs David Pitt-Watson, founder of Hermes Equity criticised high pension charges in the UK by comparison with Europe, and called for a reduction in fees, which amount to 40% of the money invested over 25 years assuming an annual charge of 1.5%. The £2 billion Abbey Life Equity fund returned 60% over 10 years, just over half the return on the un-managed FTSE All Share Index. Abbey Life pensions have been the subject of widespread criticism in the UK press and media, and in November 2008 Abbey Life was instructed by the FSA to remove unfair contract terms from material in its Retirement Pack. In Summer 2008, Money Marketing reported that Independent Financial Advisers were concerned about Abbey Life's practice of automatically vesting clients pensions into its own annuity without their consent. One adviser reported that a plan had been vested on the worst possible terms, with no tax-free cash, no widow's option and the pension paid annually in arrears. CIB In little over a decade, Deutsche Bank’s CIB has established itself as one of the world’s leading investment banking houses. CIB comprises the bank’s market-leading Global Markets and Global Banking Divisions. Until recently, Global Markets contributed a major slice of Deutsche Bank’s profitability and revenues. The business is responsible for sales and trading of debt and equity, derivatives and other innovative products. Global Markets’ prowess in bond markets, foreign exchange and derivatives has brought many awards and accolades over the past five years. However, from 2004/5 Deutsche Bank embarked on a programme of cost reduction, initially axing 6,400 jobs in London, Frankfurt and elsewhere. In November 2008, acting in response to the credit crisis, the Bank announced a further staff reduction axeing 1 in 7 of its traders, a loss of 900 jobs, mainly in London and New York. Global Banking comprises a major Merger & Acquisitions (M&A) practice that has grown significantly over the past five years. In 2007, the bank’s M&A business, in competition with banks and institutions with long-standing and well established M&A reputations, made further strides in building a world-class franchise. Global Banking also includes a global capital markets business that has a significant and innovative presence in the European initial public offering , equity, debt and high yield markets. Coverage of clients is also housed in Global Banking. Global Transaction Banking, which forms part of Global Banking, deals with cash management, clearing, trade finance and trust & securities services. This business has grown fivefold in recent years and it now an industry leader. Deutsche Bank has won numerous awards for the quality of its transaction banking service especially in the area of cash management. It is now one of the largest divisions of the Bank by ranked by IBIT. CIB’s clients are mainly private and public sector institutions, including sovereign states, supranational bodies, global and multinational companies and medium-sized and small businesses. PCAM Private Clients & Asset Management (PCAM) is composed of Private Wealth Management, Private & Business Clients and Asset Management. This trio of business divisions include Deutsche Bank’s investment management business for private and institutional clients, together with retail banking activities for private clients and small and medium-sized businesses. Private Wealth Management Private Wealth Management is the bank’s private banking arm, serving high net worth individuals and families worldwide. The division has a strong presence in the world's private banking hotspots, including Switzerland, Luxembourg, the Channel Islands, the Caymans and Dubai.
Private & Business Clients Private & Business Clients is Deutsche Bank’s retail network which has grown significantly over the past few years, expanding in Italy, Spain and Poland as well as the bank’s home market of Germany. In the past two years, expansion has also taken place in emerging markets such as India and China. Asset Management manifests itself in a number of ways at Deutsche Bank. In Germany, DWS Investments is an award-winning a highly respected mutual fund manager with around €270bn under management. In the U.S. and Europe, RREEF Alternative Investments, the global alternative investment management arm of Deutsche Bank, had more than €60bn of assets under management as at the end of 2007.
Communication Early understanding of modern communication tools has contributed to create the international recognition Deutsche Bank enjoys today. In 1972 the bank created the world known blue logo "Slash in a Square" designed by Anton Stankowski and intended to represent growth within a risk-controlled framework. Deutsche Bank owns the two-letter-domain db.com since September 1997. Deutsche Bank is now one of the few large corporations worldwide and the only bank in Germany to own a two letter ".com" domain name.
Acquisitions Morgan, Grenfell & Company, 1990. Bankers Trust 30 November 1998. Scudder Investments, 2001 Berkshire Mortgage Finance October 22, 2004. Chapel Funding, now DB Home Lending September 12 2006 MortgageIT Holdings January 3, 2007 Notable current and former employees Hermann Josef Abs - Deutsche Bank chairman (1957-67) Sir John Craven - Financier in London Michael Dobson - Head of Schroders Alfred Herrhausen - Deutsche Bank chairman (1971-89) Edson Mitchell - Head of Global Markets (1953-2000) Karl Kimmich - Deutsche Bank chairman (1942-1945) Public service Otto Hermann Kahn - Philanthropist
ABN AMRO
ABN AMRO is a Dutch bank, currently owned by RFS Holdings B.V., a consortium of Royal Bank of Scotland Group, the Government of the Netherlands, and Banco Santander. The bank was created as the result of the 1990-91 merger between Amsterdam-Rotterdam (AMRO) Bank and ABN, whose history dated back to the founding of the Nederlandsche Handel-Maatschappij in 1824. Between 1991 and 2007, ABN AMRO was one of the largest banks in Europe and had operations in about 63 countries around the world. In the biggest banking takeover in history, a consortium comprising RBS, Fortis, and Banco Santander acquired ABN AMRO in 2007. Due to the 2008 financial crisis, the Dutch government nationalised the divisions owned by Fortis, while the UK government is now in effective control over the divisions allocated to RBS due to its financial bail-out of the Scottish bank. The process of integrating some of ABN AMRO's divisions into the new owners, and divesting others, continues. On April 7, 2009 the UK state-owned RBS unveiled plans to fire upwards of 9000 staff.
2007 acquisition of ABN AMRO ABN AMRO had come to a crossroads in the beginning of 2007. The bank had still not come close to its own target of having an ROE that would put it among the top 5 of its peer group, a target that the CEO, Rijkman Groenink had set upon his appointment in 2000. From 2000 until 2006, ABN AMRO's stock price stagnated. Financial results in 2006 added to concerns about the bank's future. Operating expenses increased at a greater rate than operating revenue, and the efficiency ratio deteriorated further to 69.9%. Non-performing loans increased considerably year on year by 192%. Net profits were only boosted by sustained asset sales. There had been some calls, over the prior couple of years, for ABN AMRO to break up, to merge, or to be acquired. On February 21, 2007, the call came from the TCI hedge fund which asked the Chairman of the Supervisory Board to actively investigate a merger, acquisition or breakup of ABN AMRO, stating that the current stock price didn't reflect the true value of the underlying assets. TCI asked the chairman to put their request on the agenda of the annual shareholders' meeting of April 2007. Events accelerated when on March 20 the British bank Barclays and ABN AMRO both confirmed they were in exclusive talks about a possible merger. On March 28, ABN AMRO published the agenda for the shareholders' meeting of 2007. It included all items requested by TCI, but with the recommendation not to follow the request for a breakup of the company. However, on April 13, another British bank, the Royal Bank of Scotland (RBS) contacted ABN AMRO to propose a deal in which a consortium of banks, including RBS, Belgium's Fortis, and Spain's Banco Santander Central Hispano (now Banco Santander) would jointly bid for ABN AMRO and thereafter break up the different divisions of the company between them. According to the proposed deal, RBS would take over ABN's Chicago operations, LaSalle, and ABN's wholesale operations; while Banco Santander would take the Brazilian operations and Fortis, the Dutch operations. On April 23 ABN AMRO and Barclays announced the proposed acquisition of ABN AMRO by Barclays. The deal was valued at €67 billion. Part of the deal was the sale of LaSalle Bank to Bank of America for €21 billion. Two days later the RBS-led consortium brought out their indicative offer, worth €72 billion, if ABN AMRO would abandon its sale of LaSalle Bank to Bank of America. During the shareholders' meeting the next day, a majority of about 68% of the shareholders voted in favour of the breakup as requested by TCI. The sale of LaSalle was seen as obstructive by many: as a way of blocking the RBS bid, which hinged on further access to the US markets, in order to expand on the success of the group's existing American brands, Citizens Bank and Charter One. On May 3, 2007, the Dutch Investors' Association (Vereniging van Effectenbezitters), with the support of shareholders representing up to 20 percent of ABN's shares, took its case to the Dutch commercial court in Amsterdam, asking for an injunction against the LaSalle sale. The court ruled that the sale of LaSalle could not be viewed apart from the current merger talks of Barclays with ABN AMRO, and that the ABN AMRO shareholders should be able to approve other possible merger/acquisition candidates in a general shareholder meeting. However in July 2007, the Dutch Supreme Court ruled that Bank of America's acquisition of LaSalle Bank Corporation could proceed. Bank of America absorbed LaSalle effective October 1, 2007. On July 23 Barclays raised its offer for ABN AMRO to €67.5bn, after securing investments from the governments of China and Singapore, but it was still short of the RBS consortium's offer. Barclay's revised bid was worth €35.73 a share — 4.3% more than its previous offer. The offer, which included 37% cash, remained below the €38.40-a-share offer made the week before by the RFS consortium. Their revised offer didn't include an offer for La Salle bank, since ABN AMRO could proceed with the sale of that subsidiary to Bank of America. RBS would now settle for ABN's investment-banking division and its Asian Network. On July 30 ABN AMRO withdrew its support for Barclays’ offer which was lower than the offer from the group led by RBS. While the Barclays offer matched ABN AMRO’s “strategic vision,” the board couldn’t recommend it from “a financial point of view.” The US$98.3bn bid from RBS, Fortis and Banco Santander was 9.8% higher than Barclays’ offer. Barclays Bank withdrew its bid for ABN AMRO on 5 October, clearing the way for the RBS-led consortium's bid to go through, along with its planned dismemberment of ABN AMRO. Fortis would get ABN AMRO's Dutch and Belgian operations, Banco Santander would get Banco Real in Brazil, and Banca Antonveneta in Italy and RBS would get ABN AMRO's wholesale division and all other operations, including those in Asia. On October 9, the RFS consortium led by Royal Bank of Scotland, bidding for control of ABN AMRO, formally declared victory after shareholders, representing 86 percent of the Dutch bank’s shares, accepted the RFS group’s €70bn offer. This level of acceptance cleared the way for the consortium to take formal control. The group declared its offer unconditional on October 10, when Fortis completed its €13bn rights issue. Thus the financing required for the group’s €38-a-share offer, which included €35.60 in cash, was realised. Rijkman Groenink, Chairman of the Managing Board of ABN AMRO, who heavily backed the Barclays offer, decided that he would step down. RBS Further information: Royal Bank of Scotland Group#2008-2009 financial crisis On 22 April 2008 RBS announced the largest rights issue in British corporate history, which aimed to raise £12billion in new capital to offset a writedown of £5.9billion resulting from the bad investments and to shore up its reserves following the purchase of ABN AMRO. On 13 October 2008, British Prime Minister Gordon Brown announced a UK Government bailout of the financial system. The Treasury would infuse £37 billion ($64 billion, €47 billion) of new capital into Royal Bank of Scotland Group Plc, Lloyds TSB and HBOS Plc, to avert financial sector collapse. This resulted in a total government ownership in RBS of 58%. As a consequence of this rescue the chief executive of the group Sir Fred Goodwin offered his resignation, which was duly accepted. In January 2009 it was announced that RBS had made a loss of £28bn of which £20bn was due to ABN AMRO. At the same time the government converted their preference shares to ordinary shares resulting in a 70% ownership of RBS. Fortis Further information: Fortis (finance)#ABN AMRO and its aftermath On July 11, 2008, the CEO of Fortis, Jean Votron, stepped down after the ABN AMRO deal had depleted Fortis' capital. The total worth of Fortis, as reflected by its stock value, was at that time a third of what it had been before the acquisition, and just under the value it had paid merely for the Benelux activities of ABN AMRO. Fortis announced in September 2008 that it intended to sell its stake in RFS Holdings, which includes all activities that have not been transferred yet to Fortis (i.e. everything except Asset Management). AAC Capital Partners In 2008, ABN AMRO completed the sale of a portfolio of private equity interests in 32 European companies managed by AAC Capital Partners to a consortium comprising Goldman Sachs, AlpInvest Partners and CPP for $1.5 billion through a private equity secondary market transaction. Dutch government ownership Continuing problems in the Fortis operations in the 2008 financial crisis led to the Dutch state obtaining full control (for €16.8bn) of all Fortis operations in the Netherlands, including those parts of ABN-AMRO then belonging to Fortis. The Dutch government and the De Nederlandsche Bank president have announced the merger of Dutch Fortis and ABN AMRO parts will proceed while the bank is in state ownership. In January 2009, it was reported that shareholders in Belgian-based Fortis plan to file a lawsuit against the Belgian government over its handling of the carve-up of the troubled financial services group and are also considering a case against the Dutch government. ABN AMRO Financial Data Financial Data Years 2002 2003 2004 2005 2006 Sales net of interest €18.280mn €18.793mn €19.793mn €23.215mn €27.641mn EBITDA €4.719mn €5.848mn €6.104mn €6.705mn €6.360mn Net Result Share of the group €2.267mn €3.161mn €4.109mn €4.443mn €4.780mn Staff 105,000 105,439 105,918 98,080 135,378
World bank
The World Bank is an international financial institution that provides financial and technical assistance to developing countries for development programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing poverty. The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions: International Bank for Reconstruction and Development (IBRD) International Development Association (IDA) Whereas the latter incorporates these two in addition to three more: International Finance Corporation (IFC) Multilateral Investment Guarantee Agency (MIGA) International Centre for Settlement of Investment Disputes (ICSID)
History John Maynard Keynes (right) represented the UK at the conference, and Harry Dexter White represented the US. The World Bank is one of two major financial institutions created as a result of the Bretton Woods Conference in 1944. The International Monetary Fund, a related but separate institution, is the second. Delegates from a wide variety of countries attended the Bretton Woods Conference, but the most powerful countries in attendance, the United States and Britain, mainly shaped negotiations. 1945–1968 From its conception until 1967 the bank undertook a relatively low level on lending. Fiscal conservatism and careful screening of loan applications was generally accepted practice at the World Bank during this early period. Bank staff attempted to balance the priorities of providing loans for reconstruction and development with the need to instill confidence in the bank as a reliable institution suitable for investment. Bank president John McCloy selected France to be the first recipient of World Bank aid; two other applications presented at this time from Poland and Chile were rejected. The loan was for $ 987 million, half the amount requested, and came with strict conditions. Staff from the World Bank would monitor the end use of the funds, ensuring that the French government would present a balanced budget, and give priority of debt repayment to the World Bank over other foreign governments. The United States State Department also acted at this time to inform the French Government that Communist elements within the Cabinet needed to be removed. The French Government complied with this request and removed the Communist elements from the 1947 coalition government. Within hours of this event the loan to France was approved. The Marshall Plan of 1947 caused lending practices at the bank to be altered, as many European countries received aid that competed directly with World Bank loans. Emphasis was shifted to non-European countries and up until 1968 loans were primarily earmarked for projects that would directly enable a borrower country to repay loans (such projects as ports, highway systems, and power plants). 1968–1980 From 1968–1980 the bank focused on poverty alleviation and meeting the basic needs of people in the developing world. During this period the size and number of loans to borrower nations was greatly increased as the spectrum of loan targets expanded from infrastructure into social services and other sectors. These changes can to a large extent be attributed to Robert McNamara who assumed the Presidency in 1968 after being appointed by US president Lyndon B. Johnson. McNamara imported a technocratic managerial style to the bank that he had employed during periods he had spent serving as United States Secretary of Defense, and President of the Ford Motor Company. McNamara shifted the focus of bank policy towards measures such as building schools and hospitals, improving literacy rates and conducting large-scale agricultural reform. McNamara created a new system of gathering information from potential borrower nations that enabled the bank to process loan applications at a much faster rate. In order to finance the increased loan volume, McNamara tasked bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had previously been the primary sources of bank funding. Rotberg utilized the global bond market to greatly increase the amount of capital available to the bank. One consequence of the period of poverty alleviation lending was the rapid rise of third world debt. From 1976–1980 third world debt rose at an average annual rate of 20%. 1980–1989 In 1980 A.W. Clausen replaced Robert McNamara as World Bank president after being nominated by US President Ronald Reagan. Clausen replaced a large number of bank staffers who had been active during the McNamara era and instituted a new ideological focus in the bank. The replacement of Chief Economist Hollis B. Chenery by Anne Krueger in 1982 marked a notable policy shift at the bank. Krueger was known for her criticism of development funding as well as third world governments as rent-seeking states. Lending for the purposes of servicing third world debt largely marked the period of 1980–1989. Structural adjustment policies aimed at streamlining the economies of developing nations (largely at the expense of health and social services reductions) were also a large part of World Bank policy during this period. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank were responsible for the “reduced health, nutritional, and educational levels for tens of millions of children in Asia, Latin America, and Africa”. 1989–Present From 1989 to present, World Bank policy has shifted greatly, largely in response to criticism from a plurality of groups. Environmental groups and NGOs are often now integrated into the lending practices of the bank in order to mitigate the negative results of the previous era that prompted such harsh criticism. Bank projects now explicitly embrace a "green" focus. Activities Millennium Development Goals The World Bank's current focus is on the achievement of the Millennium Development Goals (MDGs), lending primarily to "middle-income countries" at interest rates which reflect a small mark-up over its own (AAA-rated) borrowings from capital markets; while the IDA provides low or no interest loans and grants to low income countries with little or no access to international credit markets. The IBRD is a market-based nonprofit organization, using its high credit rating to make up for the relatively low interest rate on its loans, while the IDA is funded primarily by periodic "replenishments" (grants) voted to the institution by its more affluent member countries.
Five key factors The Bank’s mission is to aid developing countries and their inhabitants to achieve development and the reduction of poverty, including achievement of the MDGs, by helping countries develop an environment for investment, jobs and sustainable growth, thus promoting economic growth through investment and enabling the poor to share the fruits of economic growth. The World Bank sees the five key factors necessary for economic growth and the creation of an enabling business environment as: Build capacity: Strengthening governments and educating government officials. Infrastructure creation: implementation of legal and judicial systems for the encouragement of business, the protection of individual and property rights and the honoring of contracts. Development of Financial Systems: the establishment of strong systems capable of supporting endeavors from micro credit to the financing of larger corporate ventures. Combating corruption: Support for countries' efforts at eradicating corruption. Research, Consultancy and Training: the World Bank provides platform for research on development issues, consultancy and conduct training programs (web based, on line, tele-/ video conferencing and class room based) open for those who are interested from academia, students, government and non-governmental organization (NGO) officers etc. The Bank obtains funding for its operations primarily through the IBRD’s sale of AAA-rated bonds in the world’s financial markets. The IBRD’s income is generated from its lending activities, with its borrowings leveraging its own paid-in capital, plus the investment of its "float". The IDA obtains the majority of its funds from forty donor countries who replenish the bank’s funds every three years, and from loan repayments, which then become available for re-lending. Loans The Bank offers two basic types of loans: investment loans and development policy loans. The former are made for the support of economic and social development projects, whereas the latter provide quick disbursing finance to support countries’ policy and institutional reforms. While the IBRD provides loans with a relatively low interest rate, the IDA’s "credits" are interest free. The project proposals of borrowers are evaluated for their economical, financial, social and environmental aspects prior to their approval. Grants The World Bank also distributes grants for the facilitation of development projects through the encouragement of innovation, cooperation between organizations and the participation of local stakeholders in projects. IDA grants are predominantly used for: Debt burden relief in the most indebted and poverty-stricken countries Improvement of sanitation and water supply Support of vaccination and immunization programs for the reduction of communicable diseases such as malaria Combating the HIV/AIDS pandemic Support of civil society organizations Creating initiatives for the reduction of greenhouse gases and the Stephen Rigney Retard clinic
Other services The Bank not only provides financial support to its member states, but also analytical and advisory services to facilitate the implementation of the lasting economic and social improvements that are needed in many under-developed countries, as well as educating members with the knowledge necessary to resolve their development problems while promoting. Leadership Current President Robert B. Zoellick The President of the Bank, currently Robert B. Zoellick, is responsible for chairing the meetings of the Boards of Directors and for overall management of the Bank. Traditionally, the Bank President has always been a US citizen nominated by the President of the United States, the largest shareholder in the bank. The nominee is subject to confirmation by the Board of Governors, to serve for a five-year, renewable term. The Executive Directors make up the Board of Directors, usually meeting twice a week to oversee activities such as the approval of loans and guarantees, new policies, the administrative budget, country assistance strategies and borrowing and financing decisions. The Vice Presidents of the Bank are its principal managers, in charge of regions, sectors, networks and functions. There are 24 Vice-Presidents, three Senior Vice Presidents and two Executive Vice Presidents. Members Main article: List of World Bank members The International Bank for Reconstruction and Development (IBRD) has 185 member countries, while the International Development Association (IDA) has 168 members.[15] Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members of IBRD are allowed to join other institutions within the Bank (such as IDA). Areas of operation The World Bank is active in the following areas: Agriculture and Rural Development Conflict and Development Development Operations and Activities Economic Policy Education Energy Environment Financial Sector Gender Governance Health, Nutrition and Population Industry Information and Communication Technologies Information, Computing and Telecommunications International Economics and Trade Labor and Social Protections Law and Justice Macroeconomic and Economic Growth Mining Poverty Reduction Poverty Private Sector Public Sector Governance Rural Development Social Development Social Protection Trade Transport Urban Development Water Resources Water Supply and Sanitation Comprehensive development framework According to the World Bank, in virtually all successful assistance projects the country itself was the driving factor. The Bank therefore works to help governments lead and implement their own development strategies and thus take a stronger hand in their own future development. The strategy was initiated by the former president of the bank, James Wolfensohn. Since 1999, it has followed a set of philosophies known as the Comprehensive Development Framework. These philosophies state that: Development strategies should be comprehensive and shaped by a long-term vision Development goals and strategies should be “owned” by the country, based on local stakeholder participation in shaping them Countries receiving assistance should lead the management and coordination of aid programs through stakeholder partnerships Development performance should be evaluated through measurable results on the ground in order to adjust the strategy to outcomes and a changing world Poverty reduction strategies For the poorest developing countries in the world the bank’s assistance plans are based on poverty reduction strategies; by combining a cross-section of local groups with an extensive analysis of the country’s financial and economical situation the World Bank develops a strategy pertaining uniquely to the country in question. The government then identifies the country’s priorities and targets for the reduction of poverty, and the World Bank aligns its aid efforts correspondingly. The bank supports certain kinds of poor people's organisations such as the Self-Employed Women's Union and Shack/Slum Dwellers International. Forty-five countries pledged US$25.1 billion in "aid for the world's poorest countries", aid that goes to the World Bank International Development Association (IDA) which distributes the gifts to eighty poorer countries. While wealthier nations sometimes fund their own aid projects, including those for diseases, and although IDA is the recipient of criticism, Robert B. Zoellick, the president of the World Bank, said when the gifts were announced on December 15, 2007, that IDA money "is the core funding that the poorest developing countries rely on". Clean Technology Fund management The World Bank has been assigned temporary management responsibility of the Clean Technology Fund (CTF), focused on making renewable energy cost-competitive with coal-fired power as quickly as possible, but this may not continue after UN's Copenhagen climate change conference in December, 2009, because of the Bank's continued investment in coal-fired power plants. Training wings World Bank Institute The World Bank Institute (WBI) creates learning opportunities for countries, World Bank staff and clients, and people committed to poverty reduction and sustainable development. WBI's work program includes training, policy consultations, and the creation and support of knowledge networks related to international economic and social development. Global Development Learning Network The Global Development Learning Network (GDLN) is a partnership of over 120 learning centers (GDLN Affiliates) in nearly 80 countries around the world. GDLN Affiliates collaborate in holding events that connect people across countries and regions for learning and dialogue on development issues. GDLN clients are typically NGOs, government, private sector and development agencies who find that they work better together on subregional, regional or global development issues using the facilities and tools offered by GDLN Affiliates. Clients also benefit from the ability of Affiliates to help them choose and apply these tools effectively, and to tap development practitioners and experts worldwide. GDLN Affiliates facilitate around 1000 videoconference-based activities a year on behalf of their clients, reaching some 90,000 people worldwide. Most of these activities bring together participants in two or more countries over a series of sessions. A majority of GDLN activities are organized by small government agencies and NGOs. GDLN Asia Pacific The GDLN in the East Asia and Pacific region has experienced rapid growth and Distance Learning Centers now operate, or are planned in 20 countries: Australia, Mongolia, Cambodia, China, Indonesia, Singapore, Philippines, Sri Lanka, Japan, Papua New Guinea, South Korea, Thailand, Laos, Timor Leste, Fiji, Afghanistan, Bangladesh, India, Nepal and New Zealand. With over 180 Distance Learning Centers, it is the largest development learning network in the Asia and Pacific region. The Secretariat Office of GDLN Asia Pacific is located in the Center of Academic Resources of Chulalongkorn University, Bangkok, Thailand. GDLN Asia Pacific was launched at the GDLN’s East Asia and Pacific regional meeting held in Bangkok from 22 to 24 May 2006. Its vision is to become “the premier network exchanging ideas, experience and know-how across the Asia Pacific Region”. GDLN Asia Pacific is a separate entity to The World Bank. It has endorsed its own Charter and Business Plan and, in accordance with the Charter, a GDLN Asia Pacific Governing Committee has been appointed. The committee comprises China (2), Australia (1), Thailand (1), The World Bank (1) and finally, a nominee of the Government of Japan (1). The organization is currently hosted by Chulalongkorn University in Bangkok, Thailand, founding member of the GDLN Asia Pacific. The Governing Committee has determined that the most appropriate legal status for the GDLN AP in Thailand is a “Foundation”. The World Bank is currently engaging a solicitor in Thailand to process all documentation in order to obtain this legal status. GDLN Asia Pacific is built on the principle of shared resources among partners engaged in a common task, and this is visible in the organizational structures that exist, as the network evolves. Physical space for its headquarters is provided by the host of the GDLN Centre in Thailand – Chulalongkorn University; Technical expertise and some infrastructure is provided by the Tokyo Development Learning Centre (TDLC); Fiduciary services are provided by Australian National University (ANU) Until the GDLN Asia Pacific is established as a legal entity tin Thailand, ANU, has offered to assist the governing committee, by providing a means of managing the inflow and outflow of funds and of reporting on them. This admittedly results in some complexity in contracting arrangements, which need to be worked out on a case by case basis and depends to some extent on the legal requirements of the countries involved. Country assistance strategies As a guideline to the World Bank's operations in any particular country, a Country Assistance Strategy is produced, in cooperation with the local government and any interested stakeholders and may rely on analytical work performed by the Bank or other parties. Criticism The World Bank has long been criticized by a range of non-governmental organizations and academics, including its former Chief Economist Joseph Stiglitz, who is equally critical of the International Monetary Fund, the US Treasury Department, and US and other developed country trade negotiators. Critics argue that the so-called free market reform policies—which the Bank advocates in many cases—in practice are often harmful to economic development if implemented badly, too quickly ("shock therapy"), in the wrong sequence, or in very weak, uncompetitive economies. In Masters of Illusion: The World Bank and the Poverty of Nations (1996), Catherine Caufield argues that the assumptions and structure of the World Bank operation in the end harms southern nations rather than promoting them. Caufield first criticizes the highly homogenized and Western recipes of "development" held by the Bank. To the World Bank, different nations and regions are indistinguishable, and ready to receive the "uniform remedy of development". She argues that to attain even small portions of success, Western approaches to life are adopted and traditional economic structures and values are abandoned. A second assumption is that poor countries cannot modernize without money and advice from abroad. A number of intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO-driven imperialism and that its intellectual contribution functions, primarily, to seek to blame the poor for their condition. Defenders of the World Bank contend that no country is forced to borrow its money. The Bank provides both loans and grants. Even the loans are concessional since they are given to countries that have no access to international capital markets. Furthermore, the loans, both to poor and middle-income countries, are at below market-value interest rates. The World Bank argues that it can help development more through loans than grants, because money repaid on the loans can then be lent for other projects. One of the strongest criticisms of the World Bank has been the way in which it is governed. While the World Bank represents 184 countries, it is run by a small number of economically powerful countries. These countries choose the leadership and senior management of the World Bank and as such, their interests are dominant within the bank. The World Bank has dual roles that are often contradictory: that of a political organization and that of an action-oriented organization. As a political organization, the World Bank must meet the demands of donor and borrowing governments, private capital markets as well as other international organizations. As an action-oriented organization, it must fulfill the role of a neutral organization specialized in delivering development aid, technical assistance, and loans. These dual roles are often inconsistent with one another. The World Bank’s obligations to donor countries and private capital markets have caused it to adopt policies and programs that endorse liberal economic theory which dictates that poverty is best alleviated by the implementation of market-oriented policies. In the 1990s the World Bank and the IMF forged the Washington Consensus, a set of policies which included deregulation and liberalization of markets, privatization and the downscaling of government. Though the Washington Consensus was conceived as a policy that would best promote development, it was criticized for ignoring issues such as equity, employment and how reforms, such as privatization, were carried out. Many now agree that the Washington Consensus placed too much emphasis on the growth of GDP and not enough on the sustainability of that growth; economically, socially, politically and environmentally, or on questioning whether or not this growth actually contributed to increased living standards. Some critics of the World Bank believe that the institution was not started in order to reduce poverty but rather to support United States' business interests, and argue that the bank has actually increased poverty and been detrimental to the environment, public health, and cultural diversity. Some critics also claim that the World Bank has consistently pushed a neoliberal agenda, imposing policies on developing countries which have been damaging, destructive and anti-developmental. Some intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO driven imperialism and that its intellectual output functions to blame the poor for their condition. The World Bank supported from the beginning the Brazilian Castello Branco’s authoritarian-rightist government, supplying it with a $80 million loan for power projects. It has also been suggested that the World Bank is an instrument for the promotion of US or Western interests in certain regions of the world. Consequently, seven South American nations have established the Bank of the South in order to minimize US influence in the region. Criticisms of the structure of the World Bank refer to the fact that the President of the Bank is always a citizen of the United States, nominated by the President of the United States (though subject to the approval of the other member countries). There have been accusations that the decision-making structure is undemocratic, as the US effectively has a veto on some constitutional decisions with just over 16% of the shares in the bank; moreover, decisions can only be passed with votes from countries whose shares total more than 85% of the bank's shares. A further criticism concerns internal governance and the manner in which the World Bank is alleged to lack transparency to external publics. Criticism of the World Bank often takes the form of protesting as seen in recent events such as the World Bank Oslo 2002 Protests, the October Rebellion, and the Battle of Seattle. Such demonstrations have occurred all over the world, even amongst the Brazilian Kayapo people. In 2008, a World Bank report which found that biofuels had driven food prices up 75% was not published. Officials confided that they believed it was withheld from publication to avoid embarrassing the President of the United States, George W. Bush. Knowledge Production The World Bank has been critiqued for the manner in which it engages in “the production, accumulation, circulation, and functioning” of knowledge. The Bank’s process in the production of knowledge has become integral to the funding and justification of large capital projects . The Bank relies on “a growing network of translocal scientists, technocrats, NGOs, and empowered citizens to help generate data and construct discursive strategies”.Its capacity to produce authoritative knowledge is a response to intense scrutiny of Bank projects resulting from the successes of growing anti-Bank and alternative-development movements. Development has relied exclusively on one knowledge system, namely, the modern Western one. The dominance of this knowledge system has dictated the marginalization and disqualification of non-Western knowledge systems”. It has been remarked, that in these alternative knowledge systems researchers and activists might find alternative rationales to guide interventionist action away from Western (Bank) produced ways of thinking . Knowledge production has become an asset to the Bank and “it is generated and used in highly strategic ways” provide justifications for development. Structural Adjustment The impact of structural adjustment policies on developing countries has been one of the most significant criticisms of the World Bank. The oil crisis in the late 1970s, the second in a decade, plunged many developing countries into economic crisis. The World Bank responded with structural adjustment loans which distributed aid to ailing countries while enforcing policy changes meant to mitigate domestic inflation and fiscal imbalance. Some of these policies included encouraging production, investment and labour-intensive manufacturing, changing real exchange rates and altering the distribution of government resources. Structural adjustment policies were most effective in countries with an institutional framework already in place that allowed for these policies to be implemented more easily. For some countries, particularly in Sub-Saharan Africa, with or without the implementation of structural adjustment policies, economic growth regressed and inflation worsened. The alleviation of poverty was not a goal of structural adjustment loans and in fact, the circumstances of the poor often worsened due to a reduction in social spending and an increase in the price of food as subsidies were lifted. By the late 1980s, international organizations began to recognize that structural adjustment policies were exacerbating the circumstances of the world’s poor. The World Bank responded by restructuring structural adjustment loans allowing for social spending to be maintained and encouraging a more gradual implementation of policies such as subsidy reductions and price changes. In 1999 the World Bank and the IMF introduced the Poverty Reduction Strategy Paper approach to replace structural adjustment loans. The Poverty Reduction Strategy Paper approach has been interpreted as an extension of structural adjustment policies as it continues to reinforce and legitimize global inequities. Neither approach has addressed the inherent flaws within the global economy that contribute to economic and social inequities within developing countries. By reinforcing the relationship between lending and client states, many believe that the World Bank has prevented indebted countries from implementing autonomous national economic policy. Water Privatization Sociologist Michael Goldman has argued that “Industry analysts predict that private water will soon be a capitalized market as precious, and as war-provoking, as oil”. Goldman continues to argue “These days, an indebted country cannot borrow capital from the World Bank or IMF without a domestic water privatization policy as a precondition”. The Bank is utilizing “the 'Washington Consensus' model of development to promote water privatization. Following this model, the World Bank is forcing many countries to commodify their water resources, rather then using their expertise in the public sector to acknowledge water as a universal human right and an essential public service".[citation needed] The push for water privatization development plays upon “the shocking tragedy that much of the world lacks access to affordable and clean water”. This image creates “new opportunities in development though it may have little to do with ultimately quenching” the needs of impoverished countries. “The problem of water scarcity for the world’s poor has been analyzed by the World Bank as one in which the public sector has failed to deliver and has therefore prevented development from “taking off” and the economy from modernizing. If the state cannot deliver something as basic as water and sanitation, the argument goes, it is a strong indication of a general failure of public-sector capacity”. However, “with the sale or lease of a public good comes more than simply a privatized service; alongside it comes a wide set of postcolonial institutional forces that intervenes in state-citizen relations and North-South dynamics”.
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