Case Study Ch.9

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Slide 2
London-based HSBC derives its name from its founding member, the Hong Kong and Shanghai Banking Corporation Limited, which was established in 1865 to permit trade between China and Europe. After World War II, Hong Kong and Shanghai Banking Corporation expanded and diversified its business with acquisitions and alliances. Through the 1980s, it expanded into Canada, Australia, and the United States; and in the 1990s, it moved into Brazil and Argentina. In 1991, its member companies came together to form HSBC Holdings PLC. HSBC is aligning its global presence because of three major trends in the global economy: (1)Emerging markets are growing faster than developed countries. (2)World trade is expanding faster than GDP.

(3)Longevity is increasing virtually everywhere. As part of its strategy, HSBC is reshaping its focus on the fast-growing economies in the emerging markets, including Mexico, Brazil, and Argentina in Latin America. It is one of the top banks in the world in foreign-exchange trading. HSBC trades foreign exchange in 75 of its treasury sites worldwide in 60 countries and territories. The bank provides market information, trades, and consulting in the area of risk exposure and how to minimize the impact of market volatility on its clients. HSBC’s entry into Argentina began in 1997 when the bank acquired Roberts S.A. de Inversiones, changing its name to HSBC Argentina Holdings S.A. Along with the banking arm, HSBC bought into a general insurance agency with the purchase of Roberts.

Slide 3
Argentina’s economy flourished in the beginning of the twentieth century, growing at an annual rate of 5 percent for three years. However, Juan Perón ruled the country from 1946 to 1955, he instituted protectionist measures and printed money to finance generous benefits for workers. State intervention in all sectors led to poor productivity and structural weakness in the economy. Inflation plagued the country; there were two bouts of hyperinflation in...
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