CIMB VS HSBC

Group 4
Joanne Guan Huey Mei
Kong Tse Chien, Bill
Law Jen Xiang
Law Jen Yang
Lim Jim Hong
Sarah Chong Hui Wen
Wong Wan Siang

Outline
Purpose
Scope
Findings
Analysis
Conclusion

Purpose
Compare
Contrast
Recommend

Scope
Environmental Factors
Sustainability
Ethical Issues
Social Responsibilities
Strategic Analysis
Decision Making
Policies and Procedures

BACKGROUND

History
Vision and Mission

History
CIMB Bank
Established by Wee Kheng
Chiang in 1924
Established in Kuching
Renamed as Commerce
International Merchant Bankers
Bhd. (CIMB) 1986

HSBC Bank
Founded by Thomas Sutherland in
1865
Established in Hong Kong and
Shanghai
Named after The Hong Kong and
Shanghai Banking Corporation
Limited.

Vision and Mission

CIMB Bank
Vision: To be the leading
ASEAN company
Mission: To provide universal
banking service and champion
the acceleration of ASEAN
integration

HSBC Bank
Vision: To be the worlds leading
financial service company
Mission: Connect customers to
opportunity

Environmental Factors
- Internal Factors
- External Factors

Internal Factors
Organizational Culture

CIMB

HSBC

Attention to Detail

Low

High

Outcome Orientation

High

High

People Orientation

High

Low

Team Orientation

High

Low

Aggressiveness

Low

High

Innovation and Risk

Taking

High

High

External Factors
Factors

CIMB

HSBC

Customers

Most well-known in
Malaysia

Top banking organizations

around the world

Competitors

Maybank, Ambank, DBS

Bank

JPMorgan Chase & Co.,

Wells Fargo, Banco
Santander

Economic

Fund selling dragged FBM

KLCI down

Financial crisis in 2008

Political

Political conflicts in
Bangkok during 2013

Inadequate compliance
with US regulations in
2012

Sociocultural

Collaborated with NGOs

to empower communities

Assisted victims affected

by Typhoon Haiyan

Technological

Launched CIMB Warrants

Portal

Investing in green
technology

SUSTAINABILITY
- Importance
- Methods of achieving

Why is it important?
To seek for commercial

opportunities
To reduce risk
To create long term value

How to achieve sustainability?

Communities investment
Strategies
Customer
Employees

Community investment
CIMB
Involved with projects
which provide learning
opportunities to the poor
Funded CIMB Regional
Scholarship

HSBC
Involved with charity
partners
Donated US$117mil to
community investment
programmes
Charitable education
project
HSBC water programmes

Strategies
CIMB
Focuses on improving
social-economic status
Funded the socialeconomic project to provide
skill training

HSBC
Focus on employees
Focus on the needs of the
customer and societies

Employees
CIMB
CIMB Credit Academy
CIMB-INSEAD
Leadership Program

HSBC
Sustainability Leadership
Programme

Customer
CIMB

HSBC

Manage customer
Manage customer
satisfactions and complaints
satisfactions and complaints
Climate Change
Customers Resolutions
Benchmark Index to reduce
Unit (CRU)
carbon emissions
Banking and Financial
BRT projects to provide
Institutions Act establish to new fuel-efficient buses
govern customer privacy

ETHICAL ISSUES
Examples
Solutions

Examples
money laundering
violation of personal privacy
misuse of personal banking

details

Ethical Issues
CIMB

HSBC

- A company director was

- Clients were involved in
involved in an illegal proceed
money laundering
- Found to be involved in
- Clients were scammed by
money laundering linked with
terrorist links
gold investment company for
RM 931.7 mil.

Solutions
Change in business operations
-> Chastise the bank properly in order to make the antimoney laundering checks to be more efficient.
Avoid customers who pose as an unacceptable

reputational risk or otherwise do not meet the

standard.

Social Responsibility

CIMB Bank
Funding impoverished rural areas, for example
Mah Meri community
Collect funds for Brickfield project

Social

Environment

Workplace

Encourage stakeholders to go-green

Link reward to performance

CIMB Bank
Community
Provide scholarships
Financial funding in sports field to
develop potential young athletes

Education
Improve English standard and
passing rate

HSBC Holding plc

Education
Education for all children

Environment
Change in way of operating
business to be environmentallyfriendly
Having green visions to motivate
their employees to be greener

HSBC Holding Plc

Workplace
Link reward-to-performance technique
(remuneration-based)

Global
Conservation and provision of clean water
source
Preservation of forestlands

STRATEGIC ANALYSIS
SWOT Analysis
Porters Five Forces

SWOT ANALYSIS

SWOT Analysis
CIMB

HSBC

Strength

Huge customer base

Have around 40 thousand
employees

Large organization as the strength

over 87 countries
Diverse culture with variety of
services

Weakness

Obstruction by the
governmental rules and
regulations
Competitors

Issues in retaining experience

workers
Leaks of transactional data of
customers

SWOT Analysis
CIMB

HSBC

Opportunity

Investment on potential
emerging market
Provision of own products

Expansion of market size by

investing on potential emerging
market
Improve their global essence

Threat

Naturally- Natural
Disasters
Political- Politic issues
that arises
Global- Economic
downturn

Naturally- Natural Disasters

Culture- Affect the
management style of the subbranches
Global- Economic crisis

PORTERS FIVE
FORCES

Porters Five Forces - CIMB

Potential Threats from New
Entrants
Banking operations and financial
businesses across the Asia Pacific
Offers one of the most comprehensive
and integrated product and service suites
Branched in ASEAN's main markets as
well as in London and New York

Porters Five Forces - HSBC

Potential Threat from New Entrants

Threats from Tesco, Sainsburys and

other markets
Due to the high profits offered by the
industry
HSBC creates high standards for the
competition using strong branding images

Porters Five Forces - CIMB

Power of Suppliers
Provide investors with ideas,
comprehensive reviews for each market,
distilled from local knowledge and views
on global investment trends
Provide a longer-term investment in these
markets

Porters Five Forces - HSBC

Power of Suppliers
The performance of the company is
affected by the concentration and size of
the suppliers and the differentiation in the
materials supplied
HSBC used the strategy of charging
suppliers with prices proposed by each
supplier

Porters Five Forces - CIMB

Power of Customers
Focuses research on
telecommunications, oil & gas or
technology in particular countries
Capture industry trends and
evaluate anomalies for todays
increasingly interconnected world

Porters Five Forces - HSBC

Power of Customers
The concentration and the size of
the customers affects the
organizations profitability
HSBC used the strategy of
managing their customers by
gaining their loyalty

Porters Five Forces - CIMB

Threat of substitutes
Functions such as overall tracking,
monitoring and analysis of economic,
monetary and financial developments
and risks based on information at micro,
sector and macro levels
Devise strategic plans and maintain its
position as one of the leading banks in
Malaysia

Porters Five Forces - HSBC

Threat of substitutes
HSBC strive to work hard in
order to sustain its position in the
banking industry
Focuses strategies on four global
businesses and innovation

Porters Five Forces - CIMB

Industrial rivalry
RHB Bank and Malaysia Building
Society.
CIMB decided to take over and
form the countrys largest bank,
eliminating its rivals and build a
better platform for its market.

Porters Five Forces - HSBC

Industrial rivalry
HSBC uses efficient
strategies
Devise strategic plans such
as HSBC Loyalty Cash ISA

Decision Making Styles

-

Problems
Decisions made

PROBLEMS

Problems

Structured = Problems
with standard procedures
to solve
Unstructured = Problems
that are unique and require
a specific method to solve

Structured Problems
CIMB

HSBC

Increased competition from MayBank

which is the largest bank in Malaysia.

Managing market data and prices

Struggles with heightened costs with

the newly bought RBS.

Obtaining customer feedback

Solution:
Solution:
- Suggests profit reinvestment plan to - Uses independent auditable data
aid in its capital reserve.
aggregator
-Know your customer utility

Unstructured Problem
CIMB

HSBC

Prediction in declination of IPOs

before election in 2013 that went
wrong. CIMB yet to form market
share to assist companies in Asia to
issue dollar-denominated deficit.

Slow economy growth in Asia,

offloading credit card business and
halving the branch network in U.S
causes loss in income

Solution:
Form Asia-wide brokerage business
that bring potential advantages to its
sales and trading.

Solution:
Shut down and sold 60 businesses
to decrease operating costs.
- Research on foreign exchange
trading
- Save up for potential settlements

DECISIONS

Good Decisions
Buying over Asia Pacific
assets and investment
banking from Royal
Bank of Scotland (RBS)

Exiting non-strategic
markets and business
investments (2012)

Brand promotion

CIMB becomes Asias

fifth largest bank by
assets

Focused on ultimate
goals

Cut down on excess

expenditure

Bad Decisions
CIMB
Merging with
RHB Capital Bhd
and Malaysia
Building Society
Bhd (MBSB)

Job redundancy
and closure of
branches

Financial losses
and neglection of
employees wellbeing

HSBC

Involvement in fraud
cases

Accused of being a
custodian of life
insurance policies in
which were used as
collateral for bonds

Untrustworthy

Focused on
long-term
goals

Take risks to
achieve maximum
benefits

Characteristics
of Good
Decision
Making
Process

Able to be aware
and adapt to
changes

Taking care of
the well-being of
stakeholders

Blinded by shortterm profits and

success

Bias towards
personal
benefits

Characteristics
of Bad Decision
Making Process

Inability to fully analyze

the resources and
information given

Negligence of
employee
welfare

POLICY AND
PROCEDURE

POLICY

Policy
CIMB Bank

HSBC Bank

Group Anti-Money Laundering

(AML) and Counter Financial of
Terrorism (CFT) Policy
Risk Management and Analytic
Policy
Group IT Policy

Compliance Disclosure Line Policy

Shareholder Communication Policy
Board Diversity Policy

PROCEDURE

Procedure (CIMB)
Whistle
Blowing
Procedure

Employee reports any wrongdoing to the

Management
The Management rectifies and take actions
while ensuring the confidentially of the
complainant

Privacy
Policy
Procedure

Information are used in accordance to

Personal Data Protection Act (PDPA)
Organizational security measures are
implemented when accessing information

Procedure (HSBC)
Internal
Control
System

To protect assets against

unauthorized use or disposal
Ensure proper accounting record
and reliability financial information
Monitoring functional, operating
and financial report standards
Identify, control and report the
risks

Conclusion
Both CIMB and HSBC Banks are affected by internal and

external factors.
Both organizations foresee the importance of sustainability
and devised ways to achieve its own sustainability and to
reach out to the community.
Strategic analysis such as SWOT Analysis and Porters
Five Forces Analysis are used to analyze the companies
strength and weaknesses.
The decisions taken by both organizations affect the
organizations performances and profitability.
Both organizations also devised their own policies and
procedures as a guideline to overcome their own problems.

Thank You