*SWOT Analysis of HSBC*

WEAKNESS:

•  Economic Slowdown: HSBC associates itself strongly with investment in the small business sector, but the current economic situation has led to increased risks, potentially compromising the activity levels in this area of the operation
• Despite falls in the UK interest rate, HSBC has increased its mortgage rates. This may be perceived negatively by borrowers and potential borrowers, adds pressure to an already depressed housing market and could ultimately lead to more defaulting as borrowers struggle with higher repayments.
• A redundancy programme announced recently may affect morale among staff, leading to decreased production and loyalty.
• HSBC’s branding emphasises its global presence, and this may be seen negatively by some customers in its implication of homogenisation and lack of personalisation.

Opportunities

• HSBC’s high level of capitalisation places it in a strong position to acquire assets and other banks like Ekonomi in Indonesia to consolidate market share.
• Banks finding trading conditions particularly difficult at present may be available at low cost
• HSBC’s generally strong position presents the opportunity to outperform competitors during the economic downturn and to build a reputation for being one of the safer banks for depositors, helping to increase resources for lending.
• Bad image of rival banks may act in favor of HSBC as customers choose to associate with good brands

THREAT:

• Trust in banks has decreased due to financial losses suffered by investors, who may be more inclined to invest elsewhere.
• Financial losses affecting banks and investors on a global scale have resulted in less credit being available to customers. In the UK this is coupled with increases in living costs resulting in less money being saved.
• The falling property market has created a rise in numbers of homeowners with negative equity. If a property is worth less than was borrowed to finance its purchase, there is little likelihood that the bank will recoup all its losses if owners default.