Early history of the Hongkong and Shanghai Banking Corporation Limited

HF: The Hongkong and Shanghai Banking Corporation Limited, as it was known then, was founded by Thomas Sutherland, a young Scotsman, who worked in Hong Kong for a large shipping firm.

Local and foreign trade in Hong Kong and at ports in China and Japan had increased rapidly in previous years, and Sutherland recognised that businesses needed better local banking facilities. By the time Sutherland’s prospectus was published, and backed by Hong Kong’s biggest firms, he had raised HKD5 million of founding capital (almost HKD100m in today’s money).

The 20,000 shares issued sold quickly and we opened our doors – in Hong Kong on 3 March 1865 – and in Shanghai a month later.

Our first office was in Wardley House at 1 Queen’s Road in the heart of Hong Kong’s Central district. 1 Queen’s Road Central remains our Hong Kong headquarters today.

In July 1865 the bank opened an office in London to facilitate foreign exchange services for clients in China and India to help recruit and train junior bankers.

International trade has always been at the heart of our business. By 1875, the bank had expanded into seven countries across Asia, Europe and North America, with branches in the ports of Yokohama, Calcutta, Saigon and Manila. We financed exports, including tea and silk from China, cotton and jute from India, and sugar from the Philippines.

The much respected Thomas Jackson, was our Chief Manager three times between 1876 and 1902. The bank prospered under his management and, by the turn of the 20th century, we operated in 16 countries and territories. We also grew our government finance business, issuing many loans for infrastructure projects, including China’s first public loan in 1874.

War and economic disruption inevitably meant that the first half of the 20th century was a difficult time for many people and, despite our focus in Asia, we were still affected by the First World War. Forty of the 169 HSBC employees from the bank’s London office who joined the British forces during the war were killed or listed as missing in action.

After the First World War, the bank expanded in Asia, where trade in rubber and tin was booming opening branches in Bangkok, Manila and Shanghai, which underlined our confidence in the region. In the 1930s, during the Great Depression, our inner reserves were drawn down and the bank focused most of its resources on survival rather than expansion. Staff bonuses were cut or cancelled and shareholder dividends were reduced.

HSBC was the leading foreign bank in China throughout the 1920s. In 1923 we opened a new office on Shanghai’s waterfront, the Bund. The entrance featured a Venetian mosaic dome and our first pair of lions, nicknamed Stephen and Stitt after senior managers from this era. The branch financed local tea and silk exporters and provided exchange services.(1)

Hong Kong surrendered to Japan on Christmas Day in 1941. The Japanese forces occupied our head office as their military headquarters and most of our overseas British employees were transferred to Stanley Internment Camp.(2)

The Second World War was an even tougher period for the bank. It survived thanks to its significant reserves and careful management, which allowed the business to retain a strong foundation for growth when peace returned.(1)

Sources:

1. History timeline/our history/ HSBC Holdings plc
2. history.hsbc.com

This article was first posted on 17th April 2025.

Related Indhhk articles:

1. The construction of the HSBC building in Hong Kong
2. The construction of the HSBC building in Hong Kong – images