Efficiency Research Of HSBC Bank(China) Company Limited

In 2011, PWC released the report “Banking in 2050 ". It is estimated that the total assets of banks in mainland China will reach more than $30 trillion in 2023, surpassing United States to become the No.1 in the world.On the one hand, with the gradually relaxation of the barriers on the entrance for the foreign banks, it has provided the convenience for the expansion of the business and encouraged more foreign banks to compete effectively in the market. The foreign banks have become an indispensable part of the banking industry in China. On the other hand, followed by this unprecedented development opportunity is the unprecedented challenge. Improving the efficiency of management, asset allocation and scale in the fierce competition for gaining more customers and owing much more market share is the big issue for the China banking to endeavor to resolve under contemporary grand economic background, and it is also the dilemma which needs to take it seriously.Being the biggest foreign bank in China, HSBC officially started business in 2007 with head office located in Shanghai. Till the end of 2014,HSBC has opened 173 outlets in the mainland China. In this thesis, efficiency of HSBC Bank(China) Company Limited(“HBCN” for Short) has been discussed in the theory of DEA. Practically, it is necessary for improving the development and management of foreign banks in China.Bank efficiency is a relative indicator, which has the board and narrow definition. More broadly conceived, bank efficiency refers to the impact of banking to the national economy. And in the narrow sense, it studies the efficiency of individual bank itself.This thesis aims to study the efficiency of HBCN in the narrow. First, based on the existing literatures, it expounds relevant theories of the definition of foreign banks, the meaning and measurement methods of bank’s operating efficiency with qualitative methods, which lays the theoretical foundation for the following analysis. Second, from the perspective of quantitative analysis, utilize financial indicators to understand HSBC China’s capital structure, assets and liabilities, profitability and liquidity status respectively in order to gain an understanding of HBCN’s operations. And Ultra efficient DEA model and Malmquist Index have been used to calculate technical efficiency, pure technical efficiency, scale efficiency of 15 sample banks of China, both of the models are based on DEA theory. By calculating the relative efficiency during 2008 to 2013 of all sample banks and through comparative analysis, it finds out the efficiency status and characteristics of HSCN. Last, deeply efficient problems of HBCN are explored on the basis of conclusions summarized previously. And proposals on how to improve efficiency are offered according to the problems.