Facebook’s Power Studied

First, a refresher: we’ve covered the comeback of the Wispa candy bar.  There was also the way in which HSBC decided not to charge interest on overdrafts, and although they were interested, most onlookers (your humble author included) thought both occurrences were pretty much lucky shots.

Data from Hitwise’s Robin Goad suggests otherwise, however; it seems that Facebook users constitute a force that every intelligent company should try to please.  “Facebook currently ranks 20th in terms of delivering traffic to retail websites,” reports Goad.  “Four percent of people leaving Facebook go to a retailer – and this number has doubled during 2007.  As [the] graph below illustrates, the major UK banks are also receiving more traffic from Facebook.”

And sure enough, four lines representing four banks are all angled sharply upwards.  HSBC’s red line is particularly steep.

“[T]he banks’ customers are also increasingly visiting social networks after doing their online banking,” Goad continues.  “The challenge for banks, retailers and others is to ensure that this traffic is benefiting their brand, rather than harming it.”

Well, as long as banks, retailers, and “others” continue to bring back candy bars and lower interest rates, I think we’ll all get along just fine.

There’s a bit more to the story than that, however; while some irresponsible “young‘uns” will indeed get away without paying interest, their bank appears to have been acting in an underhanded manner.

“In previous years HSBC, like other high street banks, had allowed students an interest-free overdraft typically up to £1,500-£2,000 for the first few years after graduation,” report Hilary Osborne and Harriet Meyer for the Guardian Unlimited.  “But in July it said it was scrapping free overdrafts and would charge interest at 9.9%.”

The policy went into effect just one month later, and a “Stop the Great HSBC Graduate Rip-Off!!!” group was created on Facebook in response; there are currently almost 6,000 members.  In the, uh, face of this and other protests, the bank eventually backed down.

“Following the feedback from our graduate account holders, both directly and through the NUS [National Student Union], we have taken the decision to freeze interest charging on 2007 graduates’ overdrafts up to £1,500, and refund any interest charged in August,” Andy Ripley, head of product development at HSBC, stated in a press release.

Say, Facebook . . . I’m buying a house.  Wanna protest mortgage rates?

HSBC will pay HK$8.1 billion ($1.1 billion) for this stake. HSBC will then own 19.9% of Ping An’s issued share capital.

“Our proposed additional investment in Ping An Insurance demonstrates the confidence HSBC has in the future of the country and we are optimistic about the long-term prospects of the insurance industry in Chinese mainland,” said HSBC Holdings group Chairman, John Bond.

HSBC will acquire 613.93 million Ping An shares for HK$13.20 a share.

“This is good news for Ping An,” said Kenneth Lee of Daiwa Institute of Research. “HSBC is a long-term investor and will help Ping An to develop its insurance platform.”

The deal must still be approved by the China Insurance Regulatory Commission as well as other Chinese regulators.

19.9 seems to be HSBC’s magical number. Last year, it bought 19.9% of China’s bank of Communication.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.

“This company will serve us as a low-cost model for origination of the consumer finance business,” said HSBC India’s group CEO, Niall SK Booker.

According to a Financial Express article,

The British bank plans to infuse fresh capital in two phases. The investment includes $150 million in new capital and $30 million in retained profit generated by the Indian operations in the year to March 2004. The second phase of infusion of $63 million will take place by June 2005.

The fresh infusion will be used to support the growth of the bank’s retail and commercial banking operations in India. The funds will also boost the bank’s CAR for its Indian operations to 13.5% from 10%, as on December 31, 2004. HSBC had also injected $150 million into its Indian operations in March 2003.

“Our Indian operations have demonstrated strong organic growth and the additional capital is expected to support our growth strategy,” said Booker.

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Net income went up to $11.84 billion, or $1.07 a share, from $8.77 billion, or $0.83 a share.

“Chairman John Bond, 63, is expanding in countries such as China and India to counter falling lending margins and higher loan loss provisions at the bank’s Household International Inc US business. HSBC bought House-hold, a lender to consumers who can’t obtain credit from other banks, for US$15 billion in 2003.

Shares of HSBC gained 0.1 percent last year, the second-worst performers on the 10-member FTSE 350 Banks index, which rose 6.8 percent. The shares rose US$0.07 to US$8.93 on Feb. 25, giving the bank a market value of about US$190 billion.”

“In 2005 the group expects consumer spending growth to slow across much of the western world, bringing increased competition and pricing pressure,” said the bank.

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