A comparison of their revenues shows that Citigroup outpaces HSBC with a revenue of 84.84 billion dollars. However, this does not mean that Citigroup is significantly better than HSBC, because they have different market shares. Citigroup competes with HSBC on the global market; they are especially strong competitors in investment banking, commercial banking and securities. One of the growing areas of competition is within their personal financial services division and their wealth management division. HSBC has seen this sector grow by 13% in the last year, due to the infusion of resources they have invested into this division; however Citigroup is still comfortably atop this category with 9.2 billion dollars in total revenue from financial services, compared to HSBC's 5.9 billion.
Other than these two primary competitors, HSBC faces a slew of emerging banks. Bank of America, also one of the world's largest banks is in the fray for many competitive segments of HSBC. In addition, emerging sector leaders such as Morgan Stanley, JP Morgan, etc. are challenging the traditional stakeholders. The largest competitive demographic right now is the Asian sector which is just on the cusp of deregulating many of its banking practices...
As a result HSBC is one among many banks that hopes to captures this large demographic. However, unlike Citigroup and other investment banks, HSBC does not have a large holding in Hong Kong, one of the reasons that it is not nearly as successful as others within the demographic. Within this demographic, HSBC must also compete with local banks, specifically the Bank of China, the Chinese Agricultural Bank, etc. These banks have large market capitalizations because of their public relationship with the government and therefore will be key stakeholders in the future competitive landscape of Asia.
Despite this competition there is significant room for growth for HSBC. They are expanding their market presence in the United States substantially, by targeting executives at established banks to bring aboard institutional clients. Several key executives from Citigroup and Bank of America have joined HSBC U.S. division in order to shore up its long-term future. This should translate to dividends for the company in the next five years. Furthermore, with the unpredictable growth of the Asian sector, HSBC has as good of an opportunity as anyone to…
