HSBC is the world's biggest bank by shareholder equity - $29.4 billion in 1996 as recorded by the latest Euromoney Bank Atlas. Much more important, it is the world's most profitable bank which is a major reason for picking it for the most prestigious of Euromoney's awards for excellence, that of best bank. Net income was an impressive $5.86 billion last year and return on equity an impressive 19.93%.
Operating in competitive markets, the world's most profitable bank is by definition also one of the best-managed. Legendary is HSBC's highly disciplined, military-style culture that has kept it stable and thriving in sometimes volatile Hong Kong as well as all over the world. Such resilience has enabled it successfully to absorb Midland Bank in the UK, to continue the development of British Bank of the Middle East (known as BritishBank since last October) and to earn 12% of operating profits from the Americas, a notably tough area for foreign banks. This latter figure is likely to rise further since over the past four months HSBC has spent $2 billion acquiring stakes in banks in Argentina, Brazil, Mexico and Peru.
But in the year ahead it could be in its more familiar Hong Kong market that the bank faces its greatest challenge with the reversion of sovereignty to China and the withering away of past privileges.