It is arguably one of the largest banks in Europe by total assets. HSBC is sitting on a $2.95 Trillion asset base. But how does HSBC make money?
This is a good question.
HSBC Holding is a British multinational bank and a financial services holding company. It was founded in 1865.
The bank is serving million of customers through its three business segments.
In it’s operation and efforts to serve corporate and individual customers, HSBC generate money.
But how does HSBC make most of its money today?
If you are curious and interested in know how HSBC makes or generates money, then you are in luck today.
In this article, you are going to learn and understand how HSBC’s business model works.
This is your ultimate guide into the money-making machine that is HSBC
Grab your coffee, tea, whiskey or wine and let us dive into this conversation.
How Does HSBC Make Money?
In very broad terms, HSBC makes money from the following segments or divisions;
- Commercial Banking
- Wealth and Personal Banking
- Global Banking & Markets
However, in very specific ways, HSBC makes money from global private banking, retail banking and wealth management.
Wealth and personal banking segment contributes 43% of the amount of money HSBC bank makes.
Geographically, Asia contributes over 65% of the money and profit HSBC generates or is making today.
When it comes to managing costs, the expenses not associated with the global business are domiciled and included in their corporate centre unit.
In conclusion, HSBC makes money from charging its customers on the products or services it provides them with.
The bank makes money from interest from deposits and interest from lending out money to individuals or corporate clients.
If you are an entrepreneur, HSBC can provide you with loans to invest in your company’s growth.
You will get support in terms of foreign exchange and trade financing as well.
The bank is doubling down its investment into the wealth management business unit. As might imagine, this can be an additional source of revenue for the HSBC bank.
However, the bank is cautious about its investment in the Chinese real estate market.
HSBC is listed in London and in Hong Kong stock exchanges.