SPONSORS: HONG KONG & SHANGHAI BANK
Name: Hong Kong & Shanghai Bank
Thomas Sutherland was a Scotsman born in Aberdeen in 1834. After graduating from university he went to work for the Peninsular and Oriental Steam Navigation Company in China, where he was involved in the construction of the Hong Kong docks. He soon realised that with trade booming - 70% of which was in opium - there was a need for a trade bank and in March 1865 he opened the Hong Kong Bank. A month later he opened a bank in Shanghai. Further branches were opened in London and San Francisco and the business was soon financing much of the lucrative opium trade.
Two years later the bank came under the control of the Hong Kong legislative council, of which Sutherland was a member, and was granted a special ordinance by the British government. Sutherland returned to Britain where he became managing-director and later chairman of P&O. He was a member of parliament for Greenock from 1884 and was knighted in 1891. He remained in control of P&O until 1914.
The bank he had established had a very unstable early career but under the management of Sir Thomas Jackson in the 1880s it grew in stature and soon became the British government's bank in the Orient. The opium trade was replaced by other businesses and HSBC's network of branches spread to Japan, into China and across the British empire.
World War I was disruptive but business boomed again in the 1920s, but in the 1930s civil war in China and Japanese expansionism affected the company's growth. During World War II the bank suffered serious setbacks with its chief manager Sir Vandeleur Grayburn dying in Japanese captivity. In 1941 British legislators insisted that the London committee of the bank take control and Arthur Morse became chairman in London.
When peace returned the bank reopened in Hong Kong and played an important role in funding its astounding economic growth. This enabled HSBC to expand and it bought the British Bank of the Middle East and India's Mercantile Bank in the 1950s. This was followed by the purchase of the Hang Seng Bank in 1965 and diversification into new areas of banking. In the 1980s the company added the US bank Marine Midland to the group. Business in the US was expanded by a joint venture with Wells Fargo Bank.
In 1991, in preparation for the handing back of Hong Kong to China, HSBC was floated on the London and Hong Kong Stock Exchanges and transferred its head office to London. The money raised by the flotation enabled HSBC to pull off one of the biggest ever takeovers by buying Britain's Midland Bank. This was followed by an aggressive marketing campaign in Europe, spearheaded by a five-year sponsorship deal with the Stewart Grand Prix F1 team, beginning in 1997. That deal continued when Stewart was taken over by the Ford Motor Company in 2000 to establish Jaguar Racing.
Today HSBC is one of the world's biggest financial companies.