HSBC Rebrand = Hide Scandals, Become Credible? The bank may be about to stage a massive disappearing act.
Big bank HSBC is getting rid of 50,000 staff members across the world; 8000 of these from the UK.
Instead of face to face contact, customers can look forward to more online banking and “self-service”. We’re hoping self-service means you can just help yourself to money whenever you like.
HSBC is also reviewing whether they should move their HQ out of the UK. The bank’s UK branches are going to be re-branded under a different name. Ooh, fancy.
HSBC stands for Hong Kong and Shanghai Banking Corporation. It was founded in Hong Kong in the 1860s. HSBC only moved across to Britain in the 1990s when they took over the UK’s Midland Bank.
Most of HSBC’s money comes from trading in Asia. At present they are losing money in the UK because of the Bank Levy. This taxes big banks on their profits and hit HSBC hard last year. They had to fork out £750 million to the tax office. Ouch.
So… it might make sense for HSBC to go home to Asia. But don’t panic HSBC customers; no decisions have been made yet.
HSBC decoded: If HSBC leave it will be a big blow for the government’s money-man; Chancellor George Osborne. He’s been struggling to keep banks and big businesses happy in the UK. Everyone worried about businesses leaving because of the EU referendum. If they do, it could damage the UK economy and mean fewer jobs and dollar for everyone. HSBC’s decision could be crucial.
HSBC’s UK high street branches are to be “ring fenced”. This means people’s deposits and mortgages are separated from the bits of HSBC that trade on the financial markets. The idea is that by keeping them separate your money is safer. These rules were brought in after the financial crisis.
The HSBC rebrand means UK branches will launch under a different name. For the banking world this is like Coca Cola changing its name to something like Lilt or 7UP. It may be big news but the product being sold is still a fizzy drink. Change the name of a bank… and it’s still a bank.
The press has reported several scandals involving HSBC in the past few years.
The Guardian reported HSBC’s recent fine for money laundering charges. Money laundering takes money gained illegally (e.g. drug money, stolen cash) and makes it look as though it was obtained legally.
HSBC’s Swiss branch was supposedly also found to have helped people avoid paying tax by hiding their income from the tax man.
This doesn’t mean all bankers are crooks, but it definitely wasn’t good press for HSBC. Is the planned HSBC rebrand an opportunity to distance themselves from the bad vibes? Not according to them:
“We will operate with a different brand name… The reason for doing it is actually so that clients are aware whether they are dealing with the ring-fenced bank or the non-ring fenced bank. Obviously if both are called HSBC it’s a bit confusing… It’s more about clients being able to work out which one they are dealing with than it is about anything else.” – HSBC Chief Executive Stuart Gulliver, speaking at a HSBC investor update.
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