HSBC Holdings plc
Banking and financial servicesFounded 1865- Updated June 2026
Reviewed by Swet Parvadiya
Last reviewed: June 2026
CorpDigest
HSBC Holdings plc
Company History
Founded 1865 in London, United Kingdom
Last reviewed: 2026-06-03 · By Swet Parvadiya
March 1865, Victoria Harbour, Hong Kong: the Hongkong and Shanghai Banking Corporation opens its doors under Thomas Sutherland, a Scotsman working for the Peninsula and Oriental Steam Navigation Company who recognized that Asia's expanding trade was being financed by European banks with no local presence. The lag between a trade transaction and its financing was costing merchants money. A bank on the ground in Hong Kong could eliminate that lag.
The early decades were built on trade finance — letters of credit, foreign exchange, documentary collections — the financial plumbing of goods moving between continents. The Shanghai branch opened in the same year. The bank established itself in Calcutta, Yokohama, Manila, and Singapore through the late 19th century, building a network of local relationships and currency expertise that no European correspondent banking arrangement could match.
The 1992 acquisition of Midland Bank in the United Kingdom for approximately £3.9 billion was the move that created the modern global banking structure. HSBC gained a major retail banking presence in Europe, moved its holding company headquarters to London, and established the organizational architecture that would house subsequent acquisitions — Household International in the United States in 2003, Credit Commercial de France in 2000, Bank of Bermuda in 2004.
The Household International acquisition proved to be the most consequential error in HSBC's modern history. Household was a subprime consumer lender. The 2008 financial crisis exposed the quality of its loan portfolio, cost HSBC billions in write-downs, and directly influenced the 2021 decision to exit American mass-market retail banking entirely. The Asian origins mattered more than the American expansion.
Thomas Sutherland founded The Hongkong and Shanghai Banking Corporation in 1865 to solve a specific commercial problem: Asian trade was expanding faster than reliable banking services could support it. He helped create an institution that provided deposits, lending, foreign exchange, remittances, and trade finance to merchants operating between Asia and Europe. Sutherland's contribution was strategic rather than merely administrative. He understood that a bank placed in Hong Kong and Shanghai could earn trust by being close to trade flows, local commercial knowledge, and British-linked capital at the same time. After the founding, he remained an influential figure in business and politics, and his early choices shaped HSBC's long-term culture: disciplined finance, international reach, and a belief that geography can be an operating advantage. The modern HSBC strategy still echoes his founding logic whenever the bank finances trade, manages currencies, and connects Asian clients to global markets.
Thomas Sutherland established the Hongkong and Shanghai Banking Corporation on March 3, 1865, to finance trade between Europe, India, and China. The bank opened simultaneously in Hong Kong and Shanghai.
HSBC acquired Midland Bank and moved its headquarters to London, creating a dual identity as both a British bank and an Asian institution. This structure later created tension as investors debated whether HSBC should re-domicile to Hong Kong.
HSBC paid $1.9B to U.S. Authorities for failing to prevent money laundering through Mexican operations and violating sanctions. The settlement transformed the bank's compliance culture and imposed years of independent monitoring.
HSBC formally committed to concentrating capital and growth investment in Asia, beginning the exit from lower-return Western retail markets (Canada, France, U.S. Mass retail) to improve group return on equity.
Georges Elhedery succeeded Noel Quinn as CEO in 2024, continuing the Asia-focused strategy while launching organizational simplification to reduce costs and improve decision-making speed across the group.
HSBC acquired Household International to expand in U.S.
HSBC acquired Midland Bank to secure a major United Kingdom banking platform and transform itself from an Asia-rooted institution into a London-headquartered global banking group. The deal gave HSBC deeper access to U.K.
HSBC acquired Credit Commercial de France to expand its European private banking, commercial banking, and retail presence. The deal was intended to deepen the group's continental European footprint and add a respected French banking franchise.
HSBC acquired Bank of Bermuda to strengthen private banking, fund administration, custody, and offshore financial services. The deal fit HSBC's international-client strategy by adding capabilities used by wealthy families, institutions, and cross-border structures.
The Hongkong and Shanghai Banking Corporation opened in Hong Kong on 3 March 1865, with a Shanghai branch following roughly one month later. It was created to finance the movement of goods between Europe, India, and China, closing the costly lag merchants faced when relying on distant European banks. That founding purpose left HSBC with a trade-finance franchise that still handles an estimated 5% of global trade flows today.
HSBC is one of only three commercial banks licensed to issue Hong Kong dollar banknotes, a role it has held since the 19th century. This function effectively made it Hong Kong's de facto central bank for much of its early history and continues to anchor its brand in the territory. The privilege reflects a depth of local relationships that competitors arriving in Asia decades later cannot easily replicate.
The Japanese occupation of Hong Kong from 1941 to 1945 severely disrupted HSBC, forcing the bank to shift its operational focus and protect reserves through the conflict. Leadership relocated and the institution had to rebuild its Hong Kong base once the war ended. The bank survived the occupation, the earlier Boxer Rebellion, and the Chinese revolution because the underlying Asian trade flows it served kept demanding a bank positioned exactly where it sat.
HSBC acquired the UK's Midland Bank in 1992 for approximately £3.9 billion, then redomiciled its holding company to London in 1993. The move gave the group a major European retail platform and placed its corporate structure under UK regulation ahead of Hong Kong's 1997 handover to Chinese sovereignty. This created the enduring tension of a bank that earns most of its profit in Asia while answering to regulators in London.
In 2012 HSBC entered a deferred prosecution agreement and paid $1.92 billion to US authorities over anti-money-laundering and sanctions failures, then the largest bank penalty in US history. The case forced HSBC to treat financial-crime controls as a strategic cost, building a compliance apparatus across its 60-plus jurisdictions. That episode permanently reshaped the bank's risk culture and lifted its ongoing compliance spending.