Ya know, ever since I found out that three of my credit cards were issued by HSBC, my curiosity has been piqued. Then a friend mentioned that it stands for the Hong Kong and Shanghai Banking Corporation. That’s a bit unnerving.
So let’s find out more…
MarketWatch.com reported March 31, 2008, on the expansion of this company in mainland China and how healthy growth is expected.
Looking at HSBC’s website, they tout themselves as “the world’s local bank.” With 9,500 offices in 85 countries, they’re enormous! Compare that to Wells Fargo’s 6,000 stores internationally.
Oh snap. What’s this? Wells Fargo HSBC Trade Bank?
Premier International Services Provider
Wells Fargo HSBC Trade Bank, a premier provider of international financial services, is dedicated to developing relationships with companies engaged in global commerce. We offer the personal attention and customized solutions you expect from a smaller bank, backed by the combined domestic and global capabilities and reach of Wells Fargo and HSBC.Together, Wells Fargo and HSBC have nearly 300 years of experience in global trade, with a network of industry professionals in over 80 countries and territories.
Huh. Well, I guess these two aren’t in competition after all. That’s a wonder considering how Wells Fargo is said to be weathering our current “financial crisis” quite well. I’ve been banking with them for years. Well, that’s weird to learn. Kinda wondering why this hasn’t come up before, and thinking that a major U.S. bank doing business with a major Chinese bank might rank more news-worthy than what frickin’ dress the soon-to-be first lady is wearing. One would think!
Wow. I don’t think this can be blamed on the rock I live under. It would be great to find out how many others know about this. In fact, I’m calling a friend now. Nope, he didn’t know either and he actually is invested in Wells Fargo (if I remember correctly).
Forbes Magazine/Business Wire ran an article on November 10, 2008, telling about the Wells Fargo HSBC Trade Bank and some company called Overseas Private Investment Corporation (OPIC) loaning money to a produce company in Mexico for growing fruits and veggies for the American market. Here’s part of what it says:
“The Trade Bank understands the financial needs of middle-market companies doing business in foreign countries,” said Sanjiv Sanghvi, president and CEO of the Trade Bank. “We offer customers such as Andrew & Williamson Sales our experience in working with OPIC to help support their growth and financial success.”
Andrew & Williamson Sales works with growers from Mexico to provide a consistent supply of premium quality produce to customers in the U.S. during those times when the U.S. does not have sufficient supply to meet the demand. Obtaining financing with the assistance of OPIC was key to setting up operations in Mexico. In addition to building a packing facility, Andrew & Williamson Sales is building the infrastructure needed for employee housing, a medical facility, daycare, school and store. This will allow the laborers needed to work in the greenhouses to relocate along with their families.
“This newly built community will help create jobs and provide comfortable living for families,” says Fred Williamson, CEO of Andrew & Williamson Sales. “We not only see a successful future for our business, but also a positive impact on both economies.”
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
[bold emphasis mine]
Well, damn. OPIC. Government agency, you say. Working with a couple of major American and Chinese banks (that are apparently merging) in loaning $5 MILLION to a company of unknown origin to grow produce in Mexican greenhouses to be marketed for American consumption. How much sense does this make to anyone else?
Let’s see what else is out there…
At another site that’s new to me, the Export-Import Bank of the United States, in a press release from 2002 announced: WELLS FARGO HSBC TRADE BANK IS EX-IM BANK’S SMALL BUSINESS BANK OF THE YEAR. Well, now I know this isn’t new news. It says, in part:
The Wells Fargo HSBC Trade Bank, an equity joint venture between Wells Fargo and the HSBC Group, focuses on the international banking needs of small businesses and utilizes Ex-Im Bank working capital guarantees and export credit insurance products. Over the past year, the Trade Bank has financed more than $60 million in over 30 transactions using Ex-Im Bank’s working capital guarantees, which have supported nearly $400 million of U.S. exports. More than two-thirds of this financing benefited small businesses.
“The Trade Bank is pleased to have been selected by Ex-Im Bank as the Small Business Bank of the Year. Since the inception of the Trade Bank, Ex-Im Bank’s guaranteed working capital loans and export credit insurance policies have been a cornerstone of our product offerings. The small business community is a very important part of Wells Fargo’s strategy, and to be recognized as a leader in supporting small business exports is a real honor,” said Ken Petrilla, Wells Fargo HSBC Trade Bank senior vice president.
Through the Trade Bank, customers have access to over 6,000 HSBC offices in over 78 countries and territories. In addition, 15 regional offices of the Trade Bank serve the United States. Wells Fargo and Company (NYSE: WFC) is a $312 billion diversified financial services company providing banking, insurance, investments, mortgage and consumer finance services through 5,400 stores, its Internet site, and other distribution channels across North America and internationally.
[bold emphasis mine]
That word again: diversified. Wells Fargo has been chanting that a lot lately to “explain” why they’re weathering the current market conditions when others are falling, but they never explain what they mean by that. Aren’t most banks pretty diversified in their investment strategies? Could have sworn Citigroup was one of the most “diversified.”
Now we’re finding out.
David Bowie’s right – this is not America. I’m not quite sure what it’s become (or is becoming), but it’s not what so many people continue to think it is. Inside, I believe more people are nervous than they let on and can feel something’s gone seriously awry in our society. This economic downturn, in my opinion, is being intentionally orchestrated, but then that’s why some refer to me as a “conspiracy theorist.” Hey, if the shoe fits…what do you call what’s going on? Business as usual?
Where was the media on this??
Banking Business Review reported in May 2007:
The Wells Fargo HSBC Trade Bank, the only nationally chartered bank in the US exclusively devoted to international trade, has launched a cross-border lending initiative, making it the first financial services company to offer financing in both domestic and foreign currency for middle market firms doing business in China.
Unlike most US banks, the joint venture partnership between HSBC and Wells Fargo can finance overseas credit needs of $10 million or less secured in part by collateral held in China.
“The Trade Bank is able to supply the missing piece to US-based middle market companies who need financing overseas,” said Sanjiv Sanghvi, Trade Bank CEO. “Securing credit in-country, in a local currency, based on overseas collateral helps companies expand overseas without tapping out their potential for domestic growth.”
At present, the bank is the only such institution offering this service to US businesses doing business abroad. The service is most suited to US-based middle market firms earning between $20 million to $500 million in revenues with an established local presence in China.
Hmmm…I don’t know what to make of it. We’ll have to sort through the articles later since I have to head out now.
Newsvine
wakemenow said
Back but now needing to continue the apartment search. I’ll return to this line of inquiry when there’s more time.
Bridget Sharp said
I didn’t realize there was a joint venture between the two major Brands. Now, it all makes sense. There were rumors that Wells Fargo was going to buy HFC/Beneficial, the red-headed step-children of HSBC. The two subprime consumer lending arms of HSBC, are responsible for the major losses in the US, and are sitting on the chopping block, waiting for the axe. Not sure if Wells will bite the bullet, and gulp it down, to increase subprime consumer lending branches. They had their own, but not sure if they are still open. But now, enlightened by your aforementioned information, hence the support to that rumor of Wells dining on HFC/Beneficial. Rumor also said, Wells would wait 3 years until the financial markets turns around. Considering right now, Wells’ plate is full, trying to gobble up Wachovia Bank, who several years back Wachovia bragged about buying a subprime mortgage company which ultimately contributed to their demise. Do you have information about HFC/Beneficial?
I am surprised that Wells would joint venture with a “foreign” bank, and I am even more surprised that Wells wouldn’t support the farmers in the USA, so Americans can make money. Mexico doesn’t have to meet the same FDA requirements, as the American farmer, therefore making the American produce more costly.
You may be right with your theory. America’s fall will come from within our own country; being consumed with the maggots of greed, selfishness and ego. When the dust settles, it will al come out in the poop. Our prime rib days, will turn into weiners, and our identity as Americans will change to Global people, owned by many countries. Welsome to the Universal States of Allegiance.
wakemenow said
Interesting stuff, Bridget! I haven’t heard of HFC/Beneficial but will definitely look into them. I’d heard that Wells Fargo was planning on buying out Wachovia too but didn’t know about HSBC’s role in their downfall.
Let’s see what more can be unearthed on this matter.
Dom said
You’d better check your sources again – HSBC is no longer known as Hong Kong Shanghai Banking Corp – that name was dropped in the early 90’s after the group was moved to London. Much like ‘AOL’ is no longer known as ‘America Online’, ‘HSBC’ is no longer Hong Kong Shanghai Banking Corp. The bank was started in Hong Kong to finance trade, but has since moved on from there.
Why is is so surprising that two major brands would form a joint venture? I’m sure Wells is itching to get into global finance and HSBC would be the best way to do it.
We live in a global economy – get over it.
wakemenow said
According to HSBC’s website:
http://www.hsbc.com/1/2/about-hsbc
“The HSBC Group is named after its founding member, The Hongkong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between China and Europe.”
So the name remains the same though yes, HSBC has now moved operations over to its London headquarters. It’s still a major bank in China as well.
Some of us aren’t interested in living under a global, corporate-ran system, Dom. And some of us just like to know what’s going on around us and do our best to make sense of what information we’re able to find.
wakemenow said
Here’s what wikipedia had to say about HSBC:
http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banking_Corporation
“HSBC’s Hong Kong headquarters are at 1 Queen’s Road Central in the Central area on Hong Kong Island. The HSBC Hong Kong headquarters building was also home to HSBC Holdings plc’s headquarters until the latter firm’s move to 8 Canada Square, London to meet the requirements of the UK regulatory authorities after the acquisition of the Midland Bank in 1992.”
Also:
“The Hongkong and Shanghai Banking Corporation Limited, based in Hong Kong, is a wholly owned subsidiary and the founding member of the HSBC group, which is traded on several stock exchanges as HSBC Holdings plc.”
Basically it says that the Asia-Pacific is controlled by HSBC China, which was the parent company/creator of HSBC Holdings Plc based in London that caters to Europe and North America.
http://en.wikipedia.org/wiki/HSBC_Holdings_plc
“The group was founded from The Hongkong and Shanghai Banking Corporation, the acronym of which led to the current name.”
Still, it’s the same bank, just split into two parts in order to cater to separate geographical areas.
“Today, whilst Hong Kong still continues to be a significant source of income for the group, no single geographical area dominates earnings. Recent acquisitions and expansion in China are returning HSBC to part of its roots. HSBC is Europe’s biggest bank and 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.”
I get that this is one way to globalize our economies, but it’s not the only nor likely the best way to go about it. Apparently a global network dominated by an international banking conglomerate and its subsidiaries is too Orwellian for my taste.
wakemenow said
Go to Part 2 on this topic: http://wakemenow.wordpress.com/2008/11/30/getting-to-know-our-banks-part-2-of-hsbc-wells-fargos-joint-venture/