Page 15 - HSBC (D) Teaching Note

in underperforming markets such as Brazil, while
switching from highly autonomous country heads to a

more centralised control structure.

In the two years to 2018 HSBC’s share price surged more

than 70 per cent which may be attributed to its

restructuring and focused growth.

Growth by Acquisition

Restructuring

Under former chairman Sir John Bond, HSBC had

embarked on an acquisition spree over the previous

decade, snapping up Household, a US subprime lender,

Republic/Safra, a private bank, and Bital, a Mexican retail

bank. The financial crisis left these acquisitions

languishing with little or no return on assets – perhaps a

stimulus for unethical behaviour in terms of tax evasion

and money laundering? Particularly so if the control
mechanisms were not in place to curb these activities.

By 2018 interest rates were going higher, most of the

restructuring work and shedding of assets had been done

at HSBC and a lot of the fines and regulatory headaches

were behind the bank.