HSBC 2003 Annual Report Download - page 26

HSBC HOLDINGS PLC
Description of Business (continued)
24
• In December 2003, upon receipt of regulatory
approval, Household sold US$2.8 billion of its
higher quality real estate secured receivables to
HSBC Bank USA. The sale represented the first
step in a strategy to lower the Group’s overall
borrowing costs by utilising liquidity at HSBC
Bank USA. Further asset transfers are planned in
2004, subject to regulatory approval.
• The major power cut in northeast USA and
southeast Canada in August resulted in minimal
disruption for HSBC’s customers. The events
management protocol and business continuity
plans for all critical areas of the North American
operations were successfully invoked with all
transactions processed and settled within
accepted customer service standards and with no
financial losses.
• The back-up site and production centre for
HSBC’s Canadian IT operations were
transferred to the Group’s state of the art facility
in Amherst, New York, allowing for greater
economies of scale in the use of technology.
• In Mexico, significant new acquisitions in 2003
included the purchase for US$144 million of
ING’s 49 per cent stake in the joint-venture
insurance company jointly owned with
HSBC Bank Mexico, and the acquisition of a
pension fund company (AFORE Allianz
Dresdner) from Allianz A.G. for
US$175 million. These new acquisitions
strengthened product offerings to HSBC’s
extensive customer base and will lead to
increased cross-selling.
• On 31 December 2003, HSBC announced its
agreement to sell to CIT Group Inc. substantially
all of the factoring assets (approximately
US$1 billion) and liabilities of HSBC Bank
USA. Net assets amounted to approximately
US$270 million. The sale agreement reflected
HSBC’s strategic emphasis on its core US
businesses.
• In January 2004, HSBC rebranded all its
Mexican banking operations as HSBC Bank
Mexico.
Personal Financial Services
• HSBC’s residential loan portfolio continued to
grow in the US, with total originations by HSBC
Bank USA increasing to US$30 billion in 2003
from US$21 billion in 2002.
• Personal Internet Banking registrations in the US
reached 520,000, an increase of 25 per cent in
the year. In Canada, 28 per cent of customers are
registered, up from 14 per cent in 2002.
• The number of HSBC Premier customers in the
US grew by 37 per cent from approximately
53,000 to over 73,000, with the launch of
Premier International Services helping to propel
the growth. In Canada, the number of Premier
customers increased by 87 per cent to 28,500 in
2003.
• clientCONNECT, an integrated customer
relationship management system, was
successfully rolled out to all branches in Canada
and across the US, resulting in increased
contacts and cross-sales.
• The direct brokerage operation, Merrill Lynch
HSBC Canada Inc., was rebranded as HSBC
InvestDirect Inc. prior to becoming a division of
HSBC Securities (Canada) Inc., thereby
completing the reintegration of the direct
investing channel into HSBC.
Consumer Finance
• Significant progress was made in 2003 in
integrating Household’s and HSBC’s technology
teams and systems, including initiatives to
consolidate data centres and convert HSBC’s
credit card portfolios onto the Household
system. Using the combined buying power of
HSBC and Household, a number of supplier
contracts, including tele-communications, were
renegotiated. Efficiency savings were also
achieved elsewhere through the integration of
various functions including purchasing, human
resources, facilities and finance.
• A number of initiatives are being developed to
expand business opportunities in consumer
finance. These included broadening the range of
products, such as offering mortgage insurance
and HSBC banking services to existing
Household customers; cross referring consumer
finance and retail services customers between
Household and HSBC; and automating HSBC’s
auto finance loan process. Also, in the US,
HSBC and Household initiated a customer
referral programme and developed near-prime