Page 111 - Flip Banks TG

Although HSBC emerged from the financial crisis in a

relatively strong position, compared with many of its

competitors who had to resort to government bailouts, it

failed to capitalise on its position. For the seven years to

2018 strategic leadership had spent much of its time trying

to repair the damage from a series of previous scandals,

many of which were associated with the acquisitions not

made on their watch.

The question is one of how much did this fire fighting deflect
from achieving a clear strategic focus?

For Gulliver, who inherited a company which prior to his

stewardship, pursued a strategy of growth by acquisition,

the environment was radically different. Legislation placed

greater onus on separating retail and investment businesses

with a stronger need for fiduciary compliance. Acquisition

had become a less attractive option rather efficiency and

effectiveness, which had been lacking in the structure and

processes of the organisation prior to Gulliver was called

for.

Growth was in the far east where historically HSBC was

strong. Its dilemma was that two thirds of its capital was in

the U.S. and Europe where interest rates were low with the

inevitable detrimental impact on earnings and returns.

Gulliver’s response to the crises confronting HSBC post 2008
was to put the bank back into a strong business and capital
position delivering earnings growth by restructuring the

bank, selling more than 100 businesses in underperforming
markets such as Brazil, while switching from highly