Investment bank Merrill Lynch and
international banking giant HSBC
this week formed a partnership to create an online banking
and investment service for individual customers outside the
The new company, to be called Merrill Lynch HSBC, will start
trading with up to $1 billion in capital. Like HSBC, it will
be headquartered in London, and later this year will launch
its services in the U.K., followed by Australia, Canada, Germany,
Hong Kong, Japan and elsewhere.
The two partners say that Merrill Lynch HSBC will be offering
a comprehensive range of services, including online banking
and brokerage, to people who are “able to take their own
informed investment decisions.”
At its launch, the new company will be headed by Merrill Lynch
veteran Edward L. Goldberg, 39 years with the firm and currently
executive vice president of Operations Services. HSBC will
appoint the chief operating officer.
“At a stroke, the new company makes HSBC and Merrill Lynch
global players in e-commerce,” said David H. Komansky, chairman
and chief executive of Merrill Lynch.
Komansky said there has never been a better time for the two
companies to re-invent the manner in which quality banking and
investment services are delivered.
Sir John Bond, HSBC group chairman, added that the new company
would have a transforming effect on the rate at which HSBC’s
e-business strategy could be implemented.
“Working together we can draw on our combined resources, both
human and financial, to expand these services globally,” said
HSBC and Merrill Lynch anticipate that the number of households
on the Internet in Europe, Asia-Pacific, Japan and Latin America
will grow more than four-fold in the next decade to 50 million.
Among them, say the partners, is a huge number of active investors
who need information, product choice and access to international
Merrill Lynch HSBC will offer, at its core, a deposit account
where customers can invest in stocks, bonds, mutual funds and
unit trusts, while earning what the partners say will be “a high
rate of return on their cash.” Multiple means of access to the
money will be a feature of the account, with checks, charge cards,
wire transfers and automated teller machines all scheduled to be
part of the service.
The new venture brings together two of the world’s leading
financial enterprises. Merrill Lynch currently manages client
assets of $1.8 trillion, while HSBC had assets of $569 billion
and 23 million customers at the end of last year.