HSBC This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. For the history of the HSBC Group prior to the founding of HSBC Holdings in 1990, see The Hongkong and Shanghai Banking Corporation. HSBC Holdings plc (traditional Chinese:) is a United Kingdom-based public limited company incorporated in England in 1990, and headquartered in London since 1993.[1] As of 2009, it is both the world's largest banking group and the world's 6th largest company according to a composite measure by Forbes magazine.[3][4] Hong Kong served as the bank's headquarters until 1992 when it moved to London as a condition of completing the acquisition of Midland Bank and as the handover of Hong Kong's sovereignty approached.[5] Today, whilst no single geographical area dominates the group's earnings, Hong Kong still continues to be a significant source of its income. Recent acquisitions and expansion in China are returning HSBC to part of its roots.[6] HSBC has an enormous operational base in Asia and significant lending, investment, and insurance activities around the world. The company has a global reach and financial fundamentals matched by few other banking or financial multinationals.[7] HSBC is listed on the London, New York City, Hong Kong, Paris and Bermuda Stock Exchanges, and is a constituent of the FTSE 100 Index and the Hang Seng Index. History Development of the bank HSBC (originally the "Hongkong and Shanghai Banking Corporation") was founded in 1865. HSBC Holdings was established in 1990 and became the parent company to The Hongkong and Shanghai Banking Corporation in preparation for its purchase of Midland Bank and a change of domicile for the transfer of sovereignty of Hong Kong. Shares in HSBC Holdings, which gave HSBC a substantial presence in the UK, was completed in 1992. As part of the takeover conditions for the purchase of Midland, HSBC was required to move its world headquarters from Hong Kong to London in 1993. Major acquisitions in South America started with the purchase of Banco Bamerindus of Brazil for $1bn in March 1997[8] and the acquisition of Roberts SA de Inversiones of Argentina for $600m in May 1997.[9] HSBC World Headquarters designed by Norman Foster in London, United Kingdom. In May 1999 HSBC embarked on a major acquisition in the United States with the purchase of Republic National Bank of New York for $10.3bn.[10] Expansion into Continental Europe took place in April 2000 with the acquisition of Crédit Commercial de France, a large French bank for £6.6bn.[11] In July 2001 HSBC bought Demirbank, an insolvent Turkish bank.[12] Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third largest retail bank for $1.1bn.[13] The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in April 2003.[14] Then in September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m.[15] In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai.[16] In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for £763m in December 2004.[17] Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August[18] and 70.1% of Dar Es Salaam Investment Bank of Iraq in October.[19] In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m.[20] In December 2007 HSBC acquired The Chinese Bank in Taiwan.[21] In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm.[22] Subprime crisis In November 2002 HSBC expanded further in the United States. Under the chairmanship of Sir John Bond, it spent £9bn (US$15.5bn) to acquire Household Finance Corporation (HFC), a US credit card issuer and subprime lender.[23] In a 2003 cover story, The Banker noted "when banking historians look back, they may conclude that [it] was the deal of the first decade of the 21st century".[24] Under the new name of HSBC Finance, the division was the second largest subprime lender in the US.[25] In March 2009, HSBC announced that it would shut down the branch network of its HSBC Finance arm in the U.S., leading to nearly 6,000 job losses and leaving only the credit card business to continue operating.[26][27] Chairman Stephen Green stated, "HSBC has a reputation for telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not undertaken."[28]; analyst Colin Morton said, "the takeover was an absolute disaster". [27][29] Although it was at the centre of the subprime storm, the wider group has weathered the economic crisis better than other global banks. According to Bloomberg, "HSBC is one of world’s strongest banks by some measures."[30] When HM Treasury required all UK banks to increase their capital in October 2007, the group transferred £750 million to London within hours, and announced that it had just lent £4 billion to other UK banks.[31] In March 2009, it announced that it had made US$9.3bn of profit in 2008 and announced a £12.5bn (US$17.7bn; HK$138bn) rights issue to enable it to buy other banks that were struggling to survive.[32] However, uncertainty over the rights' issue's implications for institutional investors caused volatility in the Hong Kong stock market: on 9 March 2009 HSBC's share price fell 24.14%, with 12 million shares sold in the last few seconds of trading.[33] Operations Corporate profile In February 2008, HSBC was named the world's most valuable banking brand by The Banker magazine.[34][35] Not known for marked fluctuations in securities exchanges around the world relative to its rivals, HSBC is more well known in banking circles for its conservative and risk-averse approach in its business operations - a company tradition going back to the 19th century.[36] In its technical management, however, HSBC has recently suffered a series of headline-making incidents in which some customer data were allegedly leaked or simply went missing. Although the consequences turned out to be small, the embarrassing effect on the group's image did not go unnoticed.[37] As of April 2, 2008, according to Forbes magazine, HSBC was the fourth largest bank in the world in terms of assets ($2,348.98 billion), the second largest in terms of sales ($146.50 billion), the largest in terms of market value ($180.81 billion). It was also the most profitable bank in the world with $19.13 billion in net income in 2007 (compared to Citigroup's $3.62 billion and Bank of America's $14.98 billion in the same period).[38] HSBC is by far the largest bank both in the United Kingdom and in Hong Kong and prints most of Hong Kong's local currency in its own name. Since the end of 2005, HSBC has been rated the largest banking group in the world by Tier 1 capital.[39] The HSBC Group has a significant presence in each of the world's major financial markets, with the Americas, Asia Pacific and Europe each representing around one third of the business. With 8,500 offices in 86 countries, 210,000 shareholders, 330,000 staff and 128 million customers worldwide, HSBC arguably has the most international presence among the world's multinational banking giants. The HSBC Group operates as a number of local banks around the world, which explains its advertising tagline "The World's Local Bank."[40] Outlined below are countries which, in 2007, generated the top 20 profit before tax figures, with the addition of the United States as specific issues exclude that country from the top 20 for 2007.[41] For details of other group companies see Category:HSBC. Americas • HSBC Bank Argentina SA has around 150 branches throughout Argentina providing a full range of banking and financial products and services to over 1.2 million customers. • HSBC acquired The Bank of Bermuda Limited in February 2004 for US$1.3bn. Founded in 1889, Bank of Bermuda is a leading provider of fund administration, trust, custody, asset management and banking services. Since the acquisition the group has focused its global efforts in some areas of these services on the island. [42] • HSBC Bank Brasil SA is HSBC’s largest presence in South America. HSBC is now among the ten largest banks in Brazil, with more than 1,700 branches and sub-branches in 550 Brazilian cities. Palacio Avenida: The headquarters of HSBC Bank Brasil, located in Curitiba. • HSBC Bank Canada is the seventh largest bank in Canada, with offices in every province except for Prince Edward Island, and is the largest foreign-owned bank in the country. HSBC has a very strong presence in overseas Chinese communities, especially in Vancouver and Toronto[citation needed]. The bank's headquarters are located in Vancouver, British Columbia. • HSBC Chile The HSBC Group first set up operations in Chile in 1981. Presently, HSBC Bank Chile is focusing on Global Banking and Commercial Bank businesses. • Banco HSBC (Costa Rica) S.A. operates around 40 branches throughout the major cities and is the third largest bank in the country. In the summer of 2007 HSBC acquired Grupo Banistmo in Panama, the owner of Banco Banex in Costa Rica. • HSBC El Salvador, SA is the third largest banking and financial service firm in the country. • HSBC Honduras has 49 branches and is one of the largest banks in the country. HSBC acquired Banco Grupo El Ahorro Hondureño (BGA) when it acquired Banistmo in Panama. Banistmo had bought the bank in 2002, about a year after it was formed from the merger of Banco La Capitalizadora Hondureña (Bancahsa; est. 1948) and the Banco del Ahorro Hondureño. • HSBC Mexico, SA is one of Mexico’s largest banking and financial services companies with over 1,400 branches, 4,800 ATMs and 6 million customers. HSBC purchased Banco Internacional, SA known as Bital, in November 2002, rebranding it overnight in January 2004. • HSBC Panama, SA HSBC's presence in Panama dates back to 1972. In 2000, HSBC Bank USA acquired Chase Manhattan's full-service, stand-alone bank business, which includes retail and wholesale capabilities. The acquisition included 11 full-service branches: seven branches in Panama City, two branches in Colon City, one branch in David and one branch in Chitre. At the time of the acquisition, HSBC operated in Panama as a full-service branch of HSBC Bank plc, with a strong franchise in corporate business as well as five retail branches. The acquisition of Chase Manhattan's business more than doubled HSBC's assets in Panama. Then in 2006, HSBC bought Grupo Banistmo, the largest financial services company in Central America, based in Panama for $1.8bn.[43] • HSBC established HSBC Paraguay SA when it acquired Lloyds TSB Bank Paraguay in 2007. Lloyds TSB had been in Paraguay since 1920 when the Bank of London and the River Plate established a branch in Asunción. • HSBC Bank Peru S.A. In October 2006, HSBC began the first phase of its plan business in Peru, with the aim of meeting small, medium and large companies during the second half of 2007 is implemented and a network of Personal Banking initial agency in Lima that will expand gradually. • HSBC Bank USA NA and HSBC Finance Corporation represent the group’s business in the US, which has been built up via the acquisition of Marine Midland (1980), Republic National Bank (1999), Household International (2003) and Metris Companies (2005) Solstice Capital Group (2006), among others. HSBC Bank USA, headquartered in Mettawa, Illinois (as of 2009), is a full service bank, with a strong branch network in New York State but also operating nationwide. HSBC Finance Corporation focuses on selected lines of consumer lending with a branch network across the US. Asia Pacific HSBC's Hong Kong head office, also designed by Norman Foster The HSBC Global Technology Centre in Pune, India develops software for the entire HSBC group[44]. • HSBC Bank Australia Limited gained its banking licence in 1986. Today, the bank offers a full range of Personal and Commercial services via a network of branches as well as direct channels. • HSBC Bangladesh opened its first branch in 1996 and now has 10 offices there. • HSBC Bank (China) Company Limited and HSBC Rural Bank Company Limited HSBC established its Shanghai branch office on 3 April 1865 and has had a continuous presence in the city since then, except for a break during the Japanese Occupation. Until the economic reforms of the late 1970s, its activities were mainly in inward remittances and export bills, however its activities now span a wider range. HSBC has purchased stakes in various local firms, including 19% of Bank of Communications, 8% of Bank of Shanghai, 16.8% of Ping An Insurance and via its subsidiary Hang Seng Bank, 12.8% of Industrial Bank. In 1996, HSBC was one of the first foreign banks approved to conduct renminbi business in Shanghai. The bank opened a new office in Chengdu and received approval to open a branch in Pudong and upgrade its Dalian office to a branch. • HSBC first opened for business in Hong Kong on 3 March 1865. It is one of three commercial banks that issue Hong Kong dollar banknotes in the Hong Kong SAR and has the largest share by value. The Hang Seng Index for stock prices in Hong Kong is named after the Hang Seng Bank Limited, which is a subsidiary of HSBC since the 1960s. The two banks are today first and second by market share in Hong Kong. • HSBC India. In 1959 HSBC acquired The Mercantile Bank of India, London and China, established in October 1853 in Bombay. HSBC is now one of the fastest growing foreign banks in India, both in domestic banking and support operations for worldwide operations (see Group Service Centres). • HSBC opened its first Indonesian office in Batavia in 1884 to serve the sugar trade. It then expanded its operation to Surabaya in 1896. Later in 1994 HSBC upgraded its Semarang agency, which it had opened in 1878, into a full branch. HSBC twice closed its operations in Indonesia. The first closure was during World War II, though it immediately returned after the war. In the mid-1960s, the Indonesia government forced the bank to close again, but the bank received a new banking license in 1968. In October 2008, HSBC paid US$608 million to acquire 89% of Bank Ekonomi, which had 2,200 staff, 86 branches, and about US$1.8 billion in assets. The acquisition made HSBC the third largest bank in the country, and gave it a total of 190 branches in 24 cities. • HSBC opened its first office in Japan in 1866 and maintains three companies there: its banking arm, HSBC Securities Japan Limited, and HSBC Global Asset Managament.[45] • HSBC Bank Malaysia Berhad traces its history back to the opening of the first HSBC office in Penang in 1884. The bank later became an issuer of currency notes for the Malaysian government. In 1994, HSBC became the first foreign bank to incorporate locally, forming Hongkong Bank Malaysia Berhad (now HSBC Bank Malaysia Berhad). The bank today provides a full range of personal and commercial financial services. HSBC Holdings plc in London UK is set to shift a significant number of jobs from Britain to its new operational headquarters in Cyberjaya, Malaysia. HSBC operates a call centre in Cyberjaya,Malaysia, a cybercity in Malaysia. • HSBC started its operations in Pakistan in 1982. Since then it has expanded to all major cities of Pakistan and operates as a full service bank. It currently has 12 offices: four in Karachi, two each in Lahore and Islamabad, and one each in Rawalpindi, Sialkot, Multan and Faisalabad. The head-office is based in Karachi. • The HSBC Group is represented in the Philippines through The Hongkong and Shanghai Banking Corporation Limited, and its subsidiary, the locally-incorporated HSBC Savings Bank (Philippines) Inc. HSBC opened its first branch in the Philippines in Binondo in November 1875. In 1883, a second branch was opened in Iloilo to serve the growing sugar industry. In 1971, the branch in Binondo was moved to Makati City. Ten years later, in 1981, the Iloilo branch was closed and a new branch in Ortigas Center, Pasig City, was opened. • HSBC Singapore operates as a full service bank with its headquarters in Collyer Quay. It is an approved Primary Dealer in the Singapore Government Securities Market and an Approved Bond Intermediary, with over a hundred staff operating one of the largest integrated dealing rooms in Singapore. • HSBC (Sri Lanka) traces its presence there to 1 July 1892. In 1882, HSBC appointed Delmege Reid and Co., which became Delmege Forsyth and Co. Ltd., as its agent in Colombo. In 1892, after the collapse of the New Oriental Banking Corporation HSBC saw an opportunity and established a branch. • HSBC (Thailand) initially opened a branch in Bangkok in 1888, becoming the first commercial bank in the country. In 1889 HSBC issued the first banknotes in Thailand. Later, in 1905, HSBC joined with France's Banque de l'Indochine to issue the first foreign loan to the Thai government for its railroad construction project. • HSBC Bank (Vietnam) Company Limited HSBC has had a long history in Vietnam, having opened a branch in Saigon (present-day Ho Chi Minh City) in 1870. The branch operated for over 100 years, until its closure in 1975. In 1992, the bank opened representative offices in Ho Chi Minh City (HCMC) and Hanoi; HSBC upgraded the office in HCMC to a full-service branch in August 1995. Europe • HSBC opened its Prague Branch in May 1997. • HSBC SA operates around 380 branches in France since the takeover of Credit Commercial de France, primarily operating under the HSBC brand. HSBC France is now the HSBC Group’s lead bank in the Eurozone, focusing on certain capital market products for a global audience, and high net worth and international business in France. • HSBC Trinkaus & Burkhardt AG traces its origins to 1785. It has operations in private, commercial and investment banking and asset management. • HSBC Hellas HSBC has been operating in Greece since 1981. In 2001, HSBC acquired Barclay's operations in Greece, which amounted to 13 branches and included fund management. • HSBC Bank Malta plc is one of the largest banks in Malta. It is a listed company but its majority shareholder is the HSBC Group. HSBC Bank Malta traces its origins back to the founding of the Anglo-Egyptian Bank in 1864, which makes it the second oldest bank in Malta. • HSBC has limited operations in Poland - mainly private/offshore banking. • HSBC (Spain) dates back to the establishment of a branch in Madrid in 1982. • HSBC Private Bank is the Swiss operating subsidiaries of the group's Private Banking business, with 12 locations in the country. • HSBC Bank plc is one of the "Big Five" high street banks in the UK, maintaining a large network of branches in England and Wales, with a smaller presence in Scotland and Northern Ireland. It acquired this presence in 1992 with the acquisition of Midland Bank plc. It also operates the previously Midland-owned telephone and internet bank First Direct, the consumer lending brand Beneficial Finance, and the financial services divisions of Marks & Spencer and the John Lewis Partnership. • HSBC Bank AS is now the fifth largest private bank in Turkey, having expanded through internal financing and via acquisition since entering the market in 1990. The bank has a network of around 330 branches, offering products and services to corporate, commercial and personal customers, both under the HSBC brand as well as the Advantage brand. • In Russia, HSBC operates through HSBC Bank Ltd (RR), which is the 96th largest bank in the country and is an affiliate of HSBC Bank plc. Middle East and Africa • HSBC Algeria commenced operating in 2008, after HSBC received permission in 2007 from the Bank of Algeria to establish a subsidiary. The branch has a capital of 2,5 billion dinars, or about 25 million euros, which it will increase to 3,6 billion dinars (36 million euros) within three years. It is headed by an Algerian, Rachid Sekak, the former head of foreign debt at the Bank of Algeria, who had earlier came from HSBC's operations in Paris.[46] • HSBC Bank Armenia cjsc is a 70 per cent indirectly owned subsidiary of HSBC Bank. Armenian business interests own the remaining equity. The bank began operations as Midland Armenia Bank in Yerevan in March 1996 and was the first international bank to open in Armenia. It is one of the leading banks in the foreign exchange market. • HSBC Bank Egypt SAE traces its origins to a joint-venture bank established in 1982. In 2001 HSBC was able to increase its ownership stake from 40% to 94.5%, after which it rebranded the bank as part of the HSBC group. • HSBC Bank Georgia jsc opened its first branch in Tbilisi, Georgia June 2008 and a second one in 2009. Its offer as presented on the bank's website is tailored for corporate customers and private/offshore banking. • In the Hashemite Kingdom of Jordan, the HSBC Group is represented by HSBC Bank Middle East Limited, the largest and most widely represented international bank in the Middle East. HSBC's presence dates back to its acquisition in 1959 of British Bank of the Middle East, which had been present in Jordan since 1889. • HSBC dates its presence in Lebanon to 1949. HSBC has branches located in St. Georges Bay, Dora, Ras Beirut, Verdun and Zouk. • HSBC Bank Middle East Limited . HSBC Oman represents a key part of HSBC Bank Middle East's business since 1959, with 6 branches and 3 customer services outlets. HSBC in Oman offers a full range of Personal Financial Services such as Current and Savings Accounts, Time Deposits, packaged financial products like HSBC Premier and STATUS, Credit Cards, Personal Loans and Home Loans. • SABB (The Saudi British Bank) In Saudi Arabia HSBC is represented by The Saudi British Bank, which is a 40% owned affiliate. HSBC is also a joint venture partner in HSBC Saudi Arabia Limited, the Kingdom’s first full service independent investment bank. • HSBC Bank Middle East Limited The United Arab Emirates represents a key part of HSBC Bank Middle East's business, with 16 branches and the firm's head office located here. • HSBC Bank Qatar provides a wide range of banking services for both corporate and individual customers in Qatar. HSBC is the largest foreign bank in Qatar and has five branches, in Doha Main Office, Al Sadd, West Bay, FTB and Grand Hamad Street as well as a large network of ATMs at 21 different locations. • HSBC established an indirect presence in Sub-Saharan Africa in 1981 through Equator Bank, a joint venture with Nedbank and the bank's executives, and entered the South African market in 1995 with a representative office. In 2003, HSBC converted the reop office in Johannesburg to a branch. The Johannesburg branch is now the regional management office for all of HSBC's Sub-Saharan Africa activities and offers corporate banking, transaction banking, investment banking, treasury and capital markets services to HSBC's major multinational clients, large local corporate and financial institutions, and governments. HSBC Securities (South Africa) offers equities services. Global product lines and programmes Group Service Centres As a cost saving measure HSBC is offshoring processing work to lower cost economies in order to reduce the cost of providing services in developed countries. These locations take on work such as data processing and customer service, but also internal software engineering at Pune, Hyderabad (India), Vishakhapatnam (India), Kolkata (India), Guangzhou (China), and Curitiba (Brazil). Chief Operating Officer Alan Jebson said in March 2005 that he would be very surprised if fewer than 25,000 people were working in the centres over the next three years: “I don’t have a precise target but I would be surprised if we had less than 15 (global service centres) in three years’ time.” He went on to say that each centre cost the bank from $20m to $30m to set up, but that for every job moved the bank saves about $20,000 (£10,400).[47] Trade unions, particularly in the US and UK, blame these centres for job losses in developed countries, and also for the effective imposition of wage caps on their members.[47] Currently, HSBC operates centers out of eight countries, including Brazil (Curitiba), The Czech Republic (Ostrava), India (Hyderabad, Bangalore, Visakhapatnam, Mumbai, Gurgaon, Kolkata and Pune), China (Shanghai, Guangzhou and Shenzhen), Malaysia (Kuala Lumpur), Poland (Krakow), Sri Lanka (Rajagiriya) and Philippines (Manila). The Malta trial for a UK high value call centre has resulted in a growing operation that country. An option under consideration is reported to be a processing centre in Vietnam to access the French skills of the population and therefore cut costs in the bank’s French operations. On June 27, 2006, HSBC reported that a "small number" of customers had suffered from fraud totaling £233,000 after an employee at the Bangalore call centre supplied confidential customer information to fraudsters.[48] HSBC Private Bank HSBC Private Bank [49] is the group's private banking operation, providing private banking and trustee services to wealthy individuals and their families worldwide. The Private Bank has in excess of 60 offices worldwide, with the major centres being Miami, New York, London, Geneva and Hong Kong. HSBC Premier Centre, Ikebukuro, Japan. HSBC Premier HSBC Premier[50] is the group's premium financial services product. The exact benefits and qualification criteria vary depending on country, but typically require deposits and investments of at least $100,000, £50,000, or €100,000. Alternatively those who have an individual annual income of at least £100,000 paid into their HSBC Premier Bank Account and are a customer of the bank's Independent Financial Advisory Service. Customers have a dedicated Premier Relationship Manager, global 24 hour access to call centres,free banking services and preferential rates. A HSBC Premier customer receives the HSBC Premier services in all countries that offer HSBC Premier, without having to meet that country's qualifying criteria. HSBC Bank International HSBC Bank International[51] is the offshore banking arm of the HSBC Group, focusing on providing offshore solutions and cross border services to expatriates and migrants. It provides a full range of multi-currency personal banking services to a range of customer segments, including a full internet banking and telephone banking service. Sometimes referred to as "HSBC Offshore", the business also offers independent financial planning, and has representative offices all over the world, often working alongside local HSBC operations in those regions. HSBC Bank International originated from the business started by Midland Bank and is based in the Channel Islands with further operations on the Isle of Man. Its operations in the Channel Islands are centred around its registered headquarters on the seafront in St Helier, Jersey. Named 'HSBC House', the building comprises departments such as Premier, Global Funds & Investments, e-Business and a 24 hour 'Direct Banking Centre'. HSBCnet HSBCnet[52] is a global service that caters to local business needs by offering specialised functionality for different regions worldwide. The system provides access to transaction banking functionality - ranging from payments and cash management to trade services features - as well as to research and analytical content from HSBC. It also includes foreign exchange and money markets trading functionality. The system is used widely by HSBC's high-end corporate and institutional clients served variously by the bank's global banking and markets, commercial banking and global transaction banking divisions. HSBCnet is also the brand under which HSBC markets its global e-commerce proposition to its corporate and institutional clients. HFC Bank (UK Operation) is a wholly owned subsidiary, with 135 High Street branches in the UK selling loans to the "sub-prime" market. During 2007 and 2008, has been trying to fend off a union recognition campaign by the Trade Union Unite. HSBC Direct HSBC Direct is a telephone/online direct banking operation which attracts customers through mortgages, accounts and savings. It was first launched in the USA[53] in November 2005 and is now available in Britain, Canada,[54] Taiwan[55], South Korea[56] and France. Poland is launching business direct in September 2009. Brand and advertising The group announced in November 1999 that the HSBC brand and the hexagon symbol would be adopted as the unified brand in all the markets where HSBC operates, with the aim of enhancing recognition of the group and its values by customers, shareholders and staff throughout the world. Logo The hexagon symbol was originally adopted by The Hongkong and Shanghai Banking Corporation as its logo in 1983. It was developed from the bank’s house flag, a white rectangle divided diagonally to produce a red hourglass shape. Like many other Hong Kong company flags that originated in the 19th century, and because of its founder's nationality, the design was based on the cross of Saint Andrew. The logo was designed by graphic artist Henry Steiner. The 2004 Jaguar car, being driven by Mark Webber. Sponsorship Having sponsored the Jaguar Racing Formula One team since the days of Stewart Grand Prix, HSBC ended its relationship with the sport when Red Bull purchased Jaguar Racing from Ford. HSBC has now switched its focus to golf, taking title sponsorship of events such as the HSBC World Match Play Championship, HSBC Women's World Match Play Championship (now defunct), HSBC Champions and HSBC Women's Champions. In football HSBC sponsors French club AS Monaco and Mexican club C.F. Pachuca, and in rugby league, HSBC sponsors Telford Raiders in the Rugby League Conference. In Australia, HSBC sponsors the New South Wales Waratahs rugby team in the Super 14 rugby union competition, as well as the Hawthorn Football Club in the Australian Football League. In the United States, HSBC owns the naming rights to the home arena of the National Hockey League's Buffalo Sabres until 2026. HSBC’s other sponsorships are mainly in the area of education, health and the environment. In November 2006, HSBC announced a $5 million partnership with SOS Children as part of Future First.[57] HSBC sponsors the Great Canadian Geography Challenge, which has had around 2 million participants in the past 12 years. Since 2001, HSBC has sponsored the Celebration of Light, an annual musical fireworks competition in Vancouver, British Columbia, Canada. In 2007 HSBC announced it would be a sponsor of the National Hockey League's Vancouver Canucks and Calgary Flames. HSBC has also sponsored a professional gaming team that was disbanded late 2007. HSBC sponsored the 2009 British and Irish Lions tour to South Africa.[58] HSBC is the official banking partner of the Wimbledon Tennis Championships, providing banking facilities on site and renaming the Road to Wimbledon junior event, as The HSBC Road to Wimbledon National 14 and Under Challenge.[59] Customer groups HSBC splits its business into four distinct groups: Personal financial services HSBC provides more than 100 million customers worldwide with a full range of personal financial services, including current and savings accounts, mortgage loans, car financing, insurance, credit cards, loans, pensions and investments. HSBC was recently rated the worst in customer service by Forrester Research, which asked bank customers to rank their banks.[60] Commercial banking HSBC provides financial services to small, medium-sized and middle-market enterprises. The group has almost 2.5 million of such customers, including sole proprietors, partnerships, clubs and associations, incorporated businesses and publicly quoted companies. Global banking and markets Private banking Main article: HSBC Private Bank HSBC Private Bank is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank, together with the private banking activities of HSBC Trinkaus, known collectively as Group Private Banking, provides services to high net worth individuals and their families through 93 locations in some 42 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. As of December 2007, profits before tax were US$1,511 million and combined client assets under management were US$494 billion. In September 2008, HSBC announced that it would combine its two Swiss private banks under one brand name in 2009, with HSBC Guyerzeller and HSBC Private Bank to be merged into one legal entity, under the newly appointed CEO of HSBC Private Bank, Alexandre Zeller.[61]

Diamond In mineralogy, diamond (from the ancient Greek ad?µa? – adámas "unbreakable") is an allotrope of carbon, where the carbon atoms are arranged in a variation of the face-centered cubic crystal structure called a diamond lattice. Diamond is less stable than graphite, but the conversion rate from diamond to graphite is negligible at ambient conditions. Diamond is renowned as a material with superlative physical qualities, most of which originate from the strong covalent bonding between its atoms. In particular, diamond has the highest hardness and thermal conductivity of any bulk material. Those properties determine the major industrial application of diamond in cutting and polishing tools. Diamond has remarkable optical characteristics. Because of its extremely rigid lattice, it can be contaminated by very few types of impurities, such as boron and nitrogen. Combined with wide transparency, this results in the clear, colorless appearance of most natural diamonds. Small amounts of defects or impurities (about one per million of lattice atoms) color diamond blue (boron), yellow (nitrogen), brown (lattice defects), green, purple, pink, orange or red. Diamond also has relatively high optical dispersion, that is ability to disperse light of different colors, which results in its characteristic luster. Excellent optical and mechanical properties, combined with efficient marketing, make diamond the most popular gemstone. Most natural diamonds are formed at high-pressure high-temperature conditions existing at depths of 140 to 190 kilometers (87 to 120 mi) in the Earth mantle. Carbon-containing minerals provide the carbon source, and the growth occurs over periods from 1 billion to 3.3 billion years (25% to 75% of the age of the Earth). Diamonds are brought close to the Earth surface through deep volcanic eruptions by a magma, which cools into igneous rocks known as kimberlites and lamproites. Diamonds can also be produced synthetically in a high-pressure high-temperature process which approximately simulates the conditions in the Earth mantle. An alternative, and completely different growth technique is chemical vapor deposition (CVD). Several non-diamond materials, which include cubic zirconia and silicon carbide and are often called diamond simulants, resemble diamond in appearance and many properties. Special gemological techniques have been specially developed to distinguish natural and synthetic diamonds and diamond simulants. History See also: Diamond (gemstone) The name diamond is derived from the ancient Greek ad?µa? (adámas), "proper", "unalterable", "unbreakable, untamed", from ?- (a-), "un-" + daµ?? (damáo), "I overpower, I tame".[3] Diamonds are thought to have been first recognized and mined in India, where significant alluvial deposits of the stone could be found many centuries ago along the rivers Penner, Krishna and Godavari. Diamonds have been known in India for at least 3,000 years but most likely 6,000 years.[4] Diamonds have been treasured as gemstones since their use as religious icons in ancient India. Their usage in engraving tools also dates to early human history.[5][6] The popularity of diamonds has risen since the 19th century because of increased supply, improved cutting and polishing techniques, growth in the world economy, and innovative and successful advertising campaigns.[7] In 1772, Antoine Lavoisier used a lens to concentrate the rays of the sun on a diamond in an atmosphere of oxygen, and showed that the only product of the combustion was carbon dioxide, proving that diamond is composed of carbon. Later in 1797, Smithson Tennant repeated and expanded that experiment. By demonstrating that burning diamond and graphite (charcoal) releases the same amount of gas he established the chemical equivalence of these substances.[8] The most familiar use of diamonds today is as gemstones used for adornment, a use which dates back into antiquity. The dispersion of white light into spectral colors is the primary gemological characteristic of gem diamonds. In the 20th century, experts in gemology have developed methods of grading diamonds and other gemstones based on the characteristics most important to their value as a gem. Four characteristics, known informally as the four Cs, are now commonly used as the basic descriptors of diamonds: these are carat, cut, color, and clarity.[9] A large, flawless diamond is known as a paragon. Material properties Main articles: Material properties of diamond and Crystallographic defects in diamond Theoretically predicted phase diagram of carbon Diamond and graphite are two allotropes of carbon: pure forms of the same element that differ in structure. A diamond is a transparent crystal of tetrahedrally bonded carbon atoms (sp3) that crystallizes into the diamond lattice which is a variation of the face centered cubic structure. Diamonds have been adapted for many uses because of the material's exceptional physical characteristics. Most notable are its extreme hardness and thermal conductivity (900–2,320 W•m-1•K-1),[10] as well as wide bandgap and high optical dispersion.[11] Above 1,700 °C (1,973 K / 3,583 °F) in vacuum or oxygen-free atmosphere, diamond converts to graphite; in air, transformation starts at ~700 °C.[12] Naturally occurring diamonds have a density ranging from 3.15–3.53 g/cm3, with pure diamond close to 3.52 g/cm3.[1] Despite the hardness of diamonds, the chemical bonds that hold the carbon atoms in diamonds together are weaker than those that hold together the other form of pure carbon, graphite. The difference is that in diamonds, the bonds form an inflexible three-dimensional lattice. In graphite, the atoms are tightly bonded into sheets, which can slide easily over one another.[13] Hardness Diamond is the hardest natural material known, where hardness is defined as resistance to scratching and is graded between 1 (softest) and 10 (hardest) using the Mohs scale of mineral hardness. Diamond has a hardness of 10 (hardest) on this scale.[14] Diamond's hardness has been known since antiquity, and is the source of its name. Diamond hardness depends on its purity, crystalline perfection and orientation: hardness is higher for flawless, pure crystals oriented to the ?111? direction (along the longest diagonal of the cubic diamond lattice).[15] Therefore, whereas it might be possible to scratch some diamonds with other materials, such as boron nitride, the hardest diamonds can only be scratched by other diamonds. In particular, nanocrystalline diamond aggregates were measured to be harder than any large single crystal diamond. Those aggregates are produced by high-pressure high-temperature treatment of graphite or fullerite (C60).[16] The hardness of diamond contributes to its suitability as a gemstone. Because it can only be scratched by other diamonds, it maintains its polish extremely well. Unlike many other gems, it is well-suited to daily wear because of its resistance to scratching—perhaps contributing to its popularity as the preferred gem in engagement or wedding rings, which are often worn every day. The hardest natural diamonds mostly originate from the Copeton and Bingara fields located in the New England area in New South Wales, Australia. These diamonds are generally small, perfect to semiperfect octahedra, and are used to polish other diamonds. Their hardness is associated with the crystal growth form, which is single-stage crystal growth. Most other diamonds show more evidence of multiple growth stages, which produce inclusions, flaws, and defect planes in the crystal lattice, all of which affect their hardness. It is possible to treat regular diamonds under a combination of high pressure and high temperature to produce diamonds that are harder than the diamonds used in hardness gauges.[17] Somewhat related to hardness is another mechanical property toughness, which is a material's ability to resist breakage from forceful impact. The toughness of natural diamond has been measured as 2.0 MPa•m1/2,[18] and the critical stress intensity factor is 3.4 MN•m-3/2.[19] Those values are good compared to other gemstones, but poor compared to most engineering materials. As with any material, the macroscopic geometry of a diamond contributes to its resistance to breakage. Diamond has a cleavage plane and is therefore more fragile in some orientations than others. Diamond cutters use this attribute to cleave some stones, prior to faceting.[20] Electrical conductivity Other specialized applications also exist or are being developed, including use as semiconductors: some blue diamonds are natural semiconductors, in contrast to most diamonds, which are excellent electrical insulators.[21] The conductivity and blue color originate from boron impurity. Boron substitutes for carbon atoms in the diamond lattice, donating a hole into the valence band.[21] Substantial conductivity is commonly observed in nominally undoped diamond grown by chemical vapor deposition. This conductivity is associated with hydrogen-related species adsorbed at the surface, and it can be removed by annealing or other surface treatments.[22][23] Color Main article: Diamond color Brown diamonds at the National Museum of Natural History in Washington, D.C Diamond has a wide bandgap of 5.5 eV corresponding to the deep ultraviolet wavelength of 225 nanometers. This means pure diamond should transmit visible light and appear as a clear colorless crystal. Colors in diamond originate from lattice defects and impurities. The diamond crystal lattice is exceptionally strong and only atoms of nitrogen, boron and hydrogen can be introduced into diamond during the growth at significant concentrations (up to atomic percents). Transition metals Ni and Co, which are commonly used for growth of synthetic diamond by high-pressure high-temperature techniques, have been detected in diamond as individual atoms; the maximum concentration is 0.01% for Ni[24] and even much less for Co. Virtually any element can be introduced to diamond by ion implantation.[25] Nitrogen is by far the most common impurity found in gem diamonds. Nitrogen is responsible for the yellow and brown color in diamonds. Boron is responsible for the gray blue colors.[11] Color in diamond has two additional sources: irradiation (usually by alpha particles), that causes the color in green diamonds; and physical deformation of the diamond crystal known as plastic deformation. Plastic deformation is the cause of color in some brown[26] and perhaps pink and red diamonds.[27] In order of rarity, colorless diamond, by far the most common, is followed by yellow and brown, by far the most common colors, then by blue, green, black, translucent white, pink, violet, orange, purple, and the rarest, red.[20] "Black", or Carbonado, diamonds are not truly black, but rather contain numerous dark inclusions that give the gems their dark appearance. Colored diamonds contain impurities or structural defects that cause the coloration, while pure or nearly pure diamonds are transparent and colorless. Most diamond impurities replace a carbon atom in the crystal lattice, known as a carbon flaw. The most common impurity, nitrogen, causes a slight to intense yellow coloration depending upon the type and concentration of nitrogen present.[20] The Gemological Institute of America (GIA) classifies low saturation yellow and brown diamonds as diamonds in the normal color range, and applies a grading scale from "D" (colorless) to "Z" (light yellow). Diamonds of a different color, such as blue, are called fancy colored diamonds, and fall under a different grading scale.[20] In 2008, the Wittelsbach Diamond, a 35.56-carat (7.11 g) blue diamond once belonging to the King of Spain, fetched over US$24 million at a Christie's auction.[28] In May 2009, a 7.03-carat (1.41 g) blue diamond fetched the highest price per carat ever paid for a diamond when it was sold at auction for 10.5 million Swiss francs (6.97 million Euro or US$9.5 million at the time).[29] That record was however beaten the same year: a 5-carat vivid pink diamond was sold for $10.8 million in Hong Kong on December 1, 2009.[30] Identification Diamonds can be identified by their high thermal conductivity. Their high refractive index is also indicative, but other materials have similar refractivity. Diamonds cut glass, but this does not positively identify a diamond because other materials, such as quartz, also lie above glass on the Mohs scale and can also cut it. Diamonds can scratch other diamonds, but this can result in damage to one or both stones. Hardness tests are infrequently used in practical gemology because of their potentially destructive nature.[14] The extreme hardness and high value of diamond means that gems are typically polished slowly using painstaking traditional techniques and greater attention to detail than is the case with most other gemstones;[8] these tend to result in extremely flat, highly polished facets with exceptionally sharp facet edges. Diamonds also possess an extremely high refractive index and fairly high dispersion. Taken together, these factors affect the overall appearance of a polished diamond and most diamantaires still rely upon skilled use of a loupe (magnifying glass) to identify diamonds 'by eye'.[31] Natural history The formation of natural diamond requires very specific conditions—exposure of carbon-bearing materials to high pressure, ranging approximately between 45 and 60 kilobars (4.5 and 6 GPa), but at a comparatively low temperature range between approximately 900–1300 °C. These conditions are met in two places on Earth; in the lithospheric mantle below relatively stable continental plates, and at the site of a meteorite strike.[32] Formation in cratons One face of an uncut octahedral diamond, showing trigons (of positive and negative relief) formed by natural chemical etching The conditions for diamond formation to happen in the lithospheric mantle occur at considerable depth corresponding to the requirements of temperature and pressure. These depths are estimated between 140 and 190 km though occasionally diamonds have crystallized at depths about 300 km as well.[33] The rate at which temperature changes with increasing depth into the Earth varies greatly in different parts of the Earth. In particular, under oceanic plates the temperature rises more quickly with depth, beyond the range required for diamond formation at the depth required. The correct combination of temperature and pressure is only found in the thick, ancient, and stable parts of continental plates where regions of lithosphere known as cratons exist. Long residence in the cratonic lithosphere allows diamond crystals to grow larger.[33] The slightly misshapen octahedral shape of this rough diamond crystal in matrix is typical of the mineral. Its lustrous faces also indicate that this crystal is from a primary deposit. Through studies of carbon isotope ratios (similar to the methodology used in carbon dating, except with the stable isotopes C-12 and C-13), it has been shown that the carbon found in diamonds comes from both inorganic and organic sources. Some diamonds, known as harzburgitic, are formed from inorganic carbon originally found deep in the Earth's mantle. In contrast, eclogitic diamonds contain organic carbon from organic detritus that has been pushed down from the surface of the Earth's crust through subduction (see plate tectonics) before transforming into diamond. These two different source of carbon have measurably different 13C:12C ratios. Diamonds that have come to the Earth's surface are generally quite old, ranging from under 1 billion to 3.3 billion years old. This is 22% to 73% of the age of the Earth.[33] Diamonds occur most often as euhedral or rounded octahedra and twinned octahedra known as macles. As diamond's crystal structure has a cubic arrangement of the atoms, they have many facets that belong to a cube, octahedron, rhombicosidodecahedron, tetrakis hexahedron or disdyakis dodecahedron. The crystals can have rounded off and unexpressive edges and can be elongated. Sometimes they are found grown together or form double "twinned" crystals at the surfaces of the octahedron. These different shapes and habits of some diamonds result from differing external circumstances. Diamonds (especially those with rounded crystal faces) are commonly found coated in nyf, an opaque gum-like skin.[34] Formation in meteorite impact craters Diamonds can also form under other naturally occurring high-pressure conditions. Very small diamonds of micrometer and nanometer sizes, known as microdiamonds or nanodiamonds respectively, have been found in meteorite impact craters. Such impact events create shock zones of high pressure and temperature suitable for diamond formation. Impact-type microdiamonds can be used as an indicator of ancient impact craters.[32] Extraterrestrial formation Not all diamonds found on Earth originated here. A type of diamond called carbonado that is found in South America and Africa may have been deposited there via an asteroid impact (not formed from the impact) about 3 billion years ago. These diamonds may have formed in the intrastellar environment, but as of 2008, there was no scientific consensus on how carbonado diamonds originated.[35][36] Presolar grains in many meteorites found on Earth contain nanodiamonds of extraterrestrial origin, probably formed in supernovas. Scientific evidence indicates that white dwarf stars have a core of crystallized carbon and oxygen nuclei. The largest of these found in the universe so far, BPM 37093, is located 50 light-years (4.7×1014 km) away in the constellation Centaurus. A news release from the Harvard-Smithsonian Center for Astrophysics described the 2,500-mile (4,000 km)-wide stellar core as a diamond.[37] It was referred to as Lucy, after the Beatles' song "Lucy in the Sky With Diamonds".[17][38] Surfacing Schematic diagram of a volcanic pipe Diamond-bearing rock is brought close to the surface through deep-origin volcanic eruptions. The magma for such a volcano must originate at a depth where diamonds can be formed[33]—150 km (93 mi) or more (three times or more the depth of source magma for most volcanoes). This is a relatively rare occurrence. These typically small surface volcanic craters extend downward in formations known as volcanic pipes.[33] The pipes contain material that was transported toward the surface by volcanic action, but was not ejected before the volcanic activity ceased. During eruption these pipes are open to the surface, resulting in open circulation; many xenoliths of surface rock and even wood and fossils are found in volcanic pipes. Diamond-bearing volcanic pipes are closely related to the oldest, coolest regions of continental crust (cratons). This is because cratons are very thick, and their lithospheric mantle extends to great enough depth that diamonds are stable. Not all pipes contain diamonds, and even fewer contain enough diamonds to make mining economically viable.[33] The magma in volcanic pipes is usually one of two characteristic types, which cool into igneous rock known as either kimberlite or lamproite.[33] The magma itself does not contain diamond; instead, it acts as an elevator that carries deep-formed rocks (xenoliths), minerals (xenocrysts), and fluids upward. These rocks are characteristically rich in magnesium-bearing olivine, pyroxene, and amphibole minerals[33] which are often altered to serpentine by heat and fluids during and after eruption. Certain indicator minerals typically occur within diamantiferous kimberlites and are used as mineralogical tracers by prospectors, who follow the indicator trail back to the volcanic pipe which may contain diamonds. These minerals are rich in chromium (Cr) or titanium (Ti), elements which impart bright colors to the minerals. The most common indicator minerals are chromium garnets (usually bright red chromium-pyrope, and occasionally green ugrandite-series garnets), eclogitic garnets, orange titanium-pyrope, red high-chromium spinels, dark chromite, bright green chromium-diopside, glassy green olivine, black picroilmenite, and magnetite. Kimberlite deposits are known as blue ground for the deeper serpentinized part of the deposits, or as yellow ground for the near surface smectite clay and carbonate weathered and oxidized portion.[33] Once diamonds have been transported to the surface by magma in a volcanic pipe, they may erode out and be distributed over a large area. A volcanic pipe containing diamonds is known as a primary source of diamonds. Secondary sources of diamonds include all areas where a significant number of diamonds have been eroded out of their kimberlite or lamproite matrix, and accumulated because of water or wind action. These include alluvial deposits and deposits along existing and ancient shorelines, where loose diamonds tend to accumulate because of their size and density. Diamonds have also rarely been found in deposits left behind by glaciers (notably in Wisconsin and Indiana); in contrast to alluvial deposits, glacial deposits are minor and are therefore not viable commercial sources of diamond.[33] Production Diamond output in 2005 See also: List of diamond mines Approximately 130 million carats (26,000 kg (57,000 lb)) of diamonds are mined annually, with a total value of nearly US$9 billion, and about 100,000 kg (220,000 lb) are synthesized annually.[39] Roughly 49% of diamonds originate from central and southern Africa, although significant sources of the mineral have been discovered in Canada, India, Russia, Brazil, and Australia.[40] They are mined from kimberlite and lamproite volcanic pipes, which can bring diamond crystals, originating from deep within the Earth where high pressures and temperatures enable them to form, to the surface. The mining and distribution of natural diamonds are subjects of frequent controversy such as concerns over the sale of blood diamonds or conflict diamonds by African paramilitary groups.[41] The diamond supply chain is controlled by a limited number of powerful businesses, and is also highly concentrated in a small number of locations around the world (see figure). Only a very small fraction of the diamond ore consists of actual diamonds. The ore is crushed, during which care is required not to destroy larger diamonds, and then sorted by density. Today, diamonds are located in the diamond-rich density fraction with the help of X-ray fluorescence, after which the final sorting steps are done by hand. Before the use of X-rays became commonplace,[42] the separation was done with grease belts; diamonds have a stronger tendency to stick to grease than the other minerals in the ore.[20] Historically diamonds were found only in alluvial deposits in southern India.[43] India led the world in diamond production from the time of their discovery in approximately the 9th century BC[4][44] to the mid-18th century AD, but the commercial potential of these sources had been exhausted by the late 18th century and at that time India was eclipsed by Brazil where the first non-Indian diamonds were found in 1725.[4] Diamond extraction from primary deposits (kimberlites and lamproites) started in the 1870s after the discovery of the Diamond Fields in South Africa.[45] Production has increased over time and now an accumulated total of 4.5 billion carats have been mined since that date.[46] Twenty percent of that amount has been mined in the last five years, and during the last 10 years, nine new mines have started production; four more are waiting to be opened soon. Most of these mines are located in Canada, Zimbabwe, Angola, and one in Russia.[46] In the U.S., diamonds have been found in Arkansas, Colorado, and Montana.[47][48] In 2004, the discovery of a microscopic diamond in the U.S. led to the January 2008 bulk-sampling of kimberlite pipes in a remote part of Montana.[48] Today, most commercially viable diamond deposits are in Russia (mostly in Sakha Republic, for example Mir pipe and Udachnaya pipe), Botswana, Australia (Northern and Western Australia) and the Democratic Republic of Congo.[49] In 2005, Russia produced almost one-fifth of the global diamond output, reports the British Geological Survey. Australia boasts the richest diamantiferous pipe, with production from the Argyle diamond mine reaching peak levels of 42 metric tons per year in the 1990s.[47][50] There are also commercial deposits being actively mined in the Northwest Territories of Canada and Brazil.[40] Diamond prospectors continue to search the globe for diamond-bearing kimberlite and lamproite pipes. Controversial sources Main articles: Kimberley Process, Blood diamond, and Child labour in the diamond industry In some of the more politically unstable central African and west African countries, revolutionary groups have taken control of diamond mines, using proceeds from diamond sales to finance their operations. Diamonds sold through this process are known as conflict diamonds or blood diamonds.[41] Major diamond trading corporations continue to fund and fuel these conflicts by doing business with armed groups. In response to public concerns that their diamond purchases were contributing to war and human rights abuses in central and western Africa, the United Nations, the diamond industry and diamond-trading nations introduced the Kimberley Process in 2002.[51] The Kimberley Process aims to ensure that conflict diamonds do not become intermixed with the diamonds not controlled by such rebel groups. This is done by requiring diamond-producing countries to provide proof that the money they make from selling the diamonds is not used to fund criminal or revolutionary activities. Although the Kimberley Process has been moderately successful in limiting the number of conflict diamonds entering the market, some still find their way in. Conflict diamonds constitute 2–3% of all diamonds traded.[52] Two major flaws still hinder the effectiveness of the Kimberley Process: (1) the relative ease of smuggling diamonds across African borders, and (2) the violent nature of diamond mining in nations that are not in a technical state of war and whose diamonds are therefore considered "clean".[51] The Canadian Government has set up a body known as Canadian Diamond Code of Conduct[53] to help authenticate Canadian diamonds. This is a stringent tracking system of diamonds and helps protect the "conflict free" label of Canadian diamonds.[54] Commercial markets See also: Diamonds as an investment A round brilliant cut diamond set in a ring The diamond industry can be separated into two distinct categories: one dealing with gem-grade diamonds and another for industrial-grade diamonds. While a large trade in both types of diamonds exists, the two markets act in dramatically different ways. Gemstones and their distribution Main article: Diamond (gemstone) A large trade in gem-grade diamonds exists. Unlike other commodities, such as most precious metals, there is a substantial mark-up in the retail sale of gem diamonds.[55] There is a well-established market for resale of polished diamonds (e.g. pawnbroking, auctions, second-hand jewelry stores, diamantaires, bourses, etc.). One hallmark of the trade in gem-quality diamonds is its remarkable concentration: wholesale trade and diamond cutting is limited to just a few locations; In 2003, 92% of the world's diamonds were cut and polished in Surat, India.[56] Other important centers of diamond cutting and trading are Antwerp, where the International Gemological Institute is based, London, New York City, Tel Aviv, and Amsterdam. A single company—De Beers—controls a significant proportion of the trade in diamonds.[57] They are based in Johannesburg, South Africa and London, England. One contributory factor is the geological nature of diamond deposits: several large primary kimberlite-pipe mines each account for significant portions of market share (such as the Jwaneng mine in Botswana, which is a single large pit operated by De Beers that can produce between 12.5 to 15 million carats of diamonds per year,[58]) whereas secondary alluvial diamond deposits tend to be fragmented amongst many different operators because they can be dispersed over many hundreds of square kilometers (e.g., alluvial deposits in Brazil). The production and distribution of diamonds is largely consolidated in the hands of a few key players, and concentrated in traditional diamond trading centers, the most important being Antwerp, where 80% of all rough diamonds, 50% of all cut diamonds and more than 50% of all rough, cut and industrial diamonds combined are handled.[59] This makes Antwerp a de facto "world diamond capital". Another important diamond center is New York City, where almost 80% of the world's diamonds are sold, including auction sales.[59] The DeBeers company, as the world's largest diamond miner holds a dominant position in the industry, and has done so since soon after its founding in 1888 by the British imperialist Cecil Rhodes. De Beers owns or controls a significant portion of the world's rough diamond production facilities (mines) and distribution channels for gem-quality diamonds. The Diamond Trading Company (DTC) is a subsidiary of De Beers and markets rough diamonds from De Beers-operated mines. De Beers and its subsidiaries own mines that produce some 40% of annual world diamond production. For most of the 20th century over 80% of the world's rough diamonds passed through De Beers,[60] but in the period 2001–2009 the figure has decreased to around 45%.[61] De Beers sold off the vast majority of its diamond stockpile in the late 1990s – early 2000s[62] and the remainder largely represents working stock (diamonds that are being sorted before sale).[63] This was well documented in the press[64] but remains little known to the general public. As a part of reducing its influence, De Beers withdrew from purchasing diamonds on the open market in 1999 and ceased, at the end of 2008, purchasing Russian diamonds mined by the largest Russian diamond company Alrosa.[65] Alrosa had to suspend their sales in October 2008 due to the global energy crisis and was expected to resume them in late 2009.[66] Apart from Alrosa, other important diamond mining companies include BHP Billiton, which is the world's largest mining company;[67] Rio Tinto Group, the owner of Argyle (100%), Diavik (60%), and Murowa (78%) diamond mines;[68] and Petra Diamonds, the owner of several major diamond mines in Africa. Further down the supply chain, members of The World Federation of Diamond Bourses (WFDB) act as a medium for wholesale diamond exchange, trading both polished and rough diamonds. The WFDB consists of independent diamond bourses in major cutting centers such as Tel Aviv, Antwerp, Johannesburg and other cities across the USA, Europe and Asia.[20] In 2000, the WFDB and The International Diamond Manufacturers Association established the World Diamond Council to prevent the trading of diamonds used to fund war and inhumane acts. WFDB's additional activities include sponsoring the World Diamond Congress every two years, as well as the establishment of the International Diamond Council (IDC) to oversee diamond grading. Once purchased by Sightholders (which is a trademark term referring to the companies that have a three-year supply contract with DTC), diamonds are cut and polished in preparation for sale as gemstones ('industrial' stones are regarded as a by-product of the gemstone market; they are used for abrasives).[69] The cutting and polishing of rough diamonds is a specialized skill that is concentrated in a limited number of locations worldwide.[69] Traditional diamond cutting centers are Antwerp, Amsterdam, Johannesburg, New York City, and Tel Aviv. Recently, diamond cutting centers have been established in China, India, Thailand, Namibia and Botswana.[69] Cutting centers with lower cost of labor, notably Surat in Gujarat, India, handle a larger number of smaller carat diamonds, while smaller quantities of larger or more valuable diamonds are more likely to be handled in Europe or North America. The recent expansion of this industry in India, employing low cost labor, has allowed smaller diamonds to be prepared as gems in greater quantities than was previously economically feasible.[59] Diamonds which have been prepared as gemstones are sold on diamond exchanges called bourses. There are 26 registered diamond bourses in the world.[70] Bourses are the final tightly controlled step in the diamond supply chain; wholesalers and even retailers are able to buy relatively small lots of diamonds at the bourses, after which they are prepared for final sale to the consumer. Diamonds can be sold already set in jewelry, or sold unset ("loose"). According to the Rio Tinto Group, in 2002 the diamonds produced and released to the market were valued at US$9 billion as rough diamonds, US$14 billion after being cut and polished, US$28 billion in wholesale diamond jewelry, and US$57 billion in retail sales.[71] Marketing The image of diamond as a valuable commodity has been preserved through clever marketing campaigns. In particular, the De Beers diamond advertising campaign is acknowledged as one of the most successful and innovative campaigns in history. N. W. Ayer & Son, the advertising firm retained by De Beers in the mid-20th century, succeeded in reviving the American diamond market and opened up new markets, even in countries where no diamond tradition had existed before. N. W. Ayer's multifaceted marketing campaign included product placement, advertising the diamond itself rather than the De Beers brand, and building associations with celebrities and royalty. This coordinated campaign has lasted decades and continues today; it is perhaps best captured by the slogan "a diamond is forever".[7] It should be noted however, that graphite is the most stable allotrope of carbon, and as such diamond should in theory eventually become graphite. Another example of successful diamond marketing is brown Australian diamonds. Brown-colored diamonds have always constituted a significant part of the diamond production, but were considered worthless for jewelry; they were not even assessed on the diamond color scale, and were predominantly used for industrial purposes. The attitude has changed drastically after the development of Argyle diamond mine in Australia in 1986. As a result of an aggressive marketing campaign, brown diamonds have become acceptable gems.[72][73] The change was mostly due to the numbers: the Argyle mine, with its 35 million carats (7,000 kg) of diamonds per year, makes about one-third of global production of natural diamonds;[74] 80% of Argyle diamonds are brown.[75] Cutting Main articles: Diamond cutting and Diamond cut The Darya-I-Nur Diamond—an example of unusual diamond cut and jewelry arrangement The mined rough diamonds are converted into gems through a multi-step process called "cutting". Diamonds are extremely hard, but also brittle and can be split up by a single blow. Therefore, diamond cutting is traditionally considered as a delicate procedure requiring skills, scientific knowledge, tools and experience. Its final goal is to produce a faceted jewel where the specific angles between the facets would optimize the diamond luster, that is dispersion of white light, whereas the number and area of facets would determine the weight of the final product. The weight reduction upon cutting is significant and can be of the order of 50%.[42] Several possible shapes are considered, but the final decision is often determined not only by scientific, but also practical considerations. For example the diamond might be intended for display or for wear, in a ring or a necklace, singled or surrounded by other gems of certain color and shape.[76] The most time-consuming part of the cutting is the preliminary analysis of the rough stone. It needs to address a large number of issues, bears much responsibility, and therefore can last years in case of unique diamonds. The following issues are considered: • The hardness of diamond and its ability to cleave strongly depend on the crystal orientation. Therefore, the crystallographic structure of the diamond to be cut is analyzed using X-ray diffraction in order to choose the optimal cutting directions. • Most diamonds contain visible non-diamond inclusions and crystal flaws. The cutter has to decide which flaws are to be removed by the cutting and which could be kept. • The diamond can be split by a single, well calculated blow of a hammer to a pointed tool, which is quick, but risky. Alternatively, it can be cut with a diamond saw, which is a more reliable but tedious procedure.[76][77] After initial cutting, the diamond is shaped in numerous stages of polishing. Unlike cutting, which is a responsible but quick operation, polishing removes material by gradual erosion and is extremely time consuming. The associated technique is well developed; it is considered as a routine and can be performed by technicians.[78] After polishing, the diamond is reexamined for possible flaws, either remaining or induced by the process. Those flaws are concealed through various diamond enhancement techniques, such as repolishing, crack filling, or clever arrangement of the stone in the jewelry. Remaining non-diamond inclusions are removed through laser drilling and filling of the voids produced.[14] Industrial uses A scalpel with synthetic diamond blade Close-up photograph of an angle grinder blade with tiny diamonds shown embedded in the metal The market for industrial-grade diamonds operates much differently from its gem-grade counterpart. Industrial diamonds are valued mostly for their hardness and heat conductivity, making many of the gemological characteristics of diamonds, such as clarity and color, irrelevant for most applications. This helps explain why 80% of mined diamonds (equal to about 135 million carats or 27 metric tons annually), unsuitable for use as gemstones, are destined for industrial use. In addition to mined diamonds, synthetic diamonds found industrial applications almost immediately after their invention in the 1950s; another 570 million carats (114 tons) of synthetic diamond is produced annually for industrial use. Approximately 90% of diamond grinding grit is currently of synthetic origin.[40] The boundary between gem-quality diamonds and industrial diamonds is poorly defined and partly depends on market conditions (for example, if demand for polished diamonds is high, some suitable stones will be polished into low-quality or small gemstones rather than being sold for industrial use). Within the category of industrial diamonds, there is a sub-category comprising the lowest-quality, mostly opaque stones, which are known as bort.[79] Industrial use of diamonds has historically been associated with their hardness; this property makes diamond the ideal material for cutting and grinding tools. As the hardest known naturally occurring material, diamond can be used to polish, cut, or wear away any material, including other diamonds. Common industrial adaptations of this ability include diamond-tipped drill bits and saws, and the use of diamond powder as an abrasive. Less expensive industrial-grade diamonds, known as bort, with more flaws and poorer color than gems, are used for such purposes.[80] Diamond is not suitable for machining ferrous alloys at high speeds, as carbon is soluble in iron at the high temperatures created by high-speed machining, leading to greatly increased wear on diamond tools compared to alternatives.[81] Specialized applications include use in laboratories as containment for high pressure experiments (see diamond anvil cell), high-performance bearings, and limited use in specialized windows.[79] With the continuing advances being made in the production of synthetic diamonds, future applications are becoming feasible. Garnering much excitement is the possible use of diamond as a semiconductor suitable to build microchips, or the use of diamond as a heat sink[82] in electronics. Synthetics, simulants, and enhancements Synthetics Main article: Synthetic diamond Synthetic diamonds of various colors grown by the high-pressure high-temperature technique Synthetic diamonds are diamonds manufactured in a laboratory, as opposed to natural diamonds which form naturally within the Earth. The gemological and industrial uses of diamond have created a large demand for rough stones. This demand has been satisfied in large part by synthetic diamonds, which have been manufactured by various processes for more than half a century. However, in recent years it has become possible to produce gem-quality synthetic diamonds of significant size.[33] The majority of commercially available synthetic diamonds are yellow and are produced by so called High Pressure High Temperature (HPHT) processes.[83] The yellow color is caused by nitrogen impurities. Other colors may also be reproduced such as blue, green or pink, which are a result of the addition of boron or from irradiation after synthesis.[84] Colorless gem cut from diamond grown by chemical vapor deposition Another popular method of growing synthetic diamond is chemical vapor deposition (CVD). The growth occurs under low pressure (below atmospheric pressure). It involves feeding a mixture of gases (typically 1 to 99 methane to hydrogen) into a chamber and splitting them to chemically active radicals in a plasma ignited by microwaves, hot filament, arc discharge, welding torch or laser.[85] This method is mostly used for coatings, but can also produce single crystals several millimeters in size (see picture).[39] At present, the annual production of gem quality synthetic diamonds is only a few thousand carats, whereas the total production of natural diamonds is around 120 million carats. Despite this fact, a purchaser is more likely to encounter a synthetic when looking for a fancy-colored diamond because nearly all synthetic diamonds are fancy-colored, while only 0.01% of natural diamonds are.[86] Simulants Main article: Diamond simulant Gem-cut synthetic silicon carbide A diamond simulant is defined as a non-diamond material that is used to simulate the appearance of a diamond. Diamond-simulant gems are often referred to as diamante. The most familiar diamond simulant to most consumers is cubic zirconia. The popular gemstone moissanite (silicon carbide) is often treated as a diamond simulant, although it is a gemstone in its own right. While moissanite looks similar to diamond, its main disadvantage as a diamond simulant is that cubic zirconia is far cheaper and arguably equally convincing. Both cubic zirconia and moissanite are produced synthetically.[87] Enhancements Main article: Diamond enhancement Diamond enhancements are specific treatments performed on natural or synthetic diamonds (usually those already cut and polished into a gem), which are designed to better the gemological characteristics of the stone in one or more ways. These include laser drilling to remove inclusions, application of sealants to fill cracks, treatments to improve a white diamond's color grade, and treatments to give fancy color to a white diamond.[88] Coatings are increasingly used to give a diamond simulant such as cubic zirconia a more "diamond-like" appearance. One such substance is diamond-like carbon—an amorphous carbonaceous material that has some physical properties similar to those of the diamond. Advertising suggests that such a coating would transfer some of these diamond-like properties to the coated stone, hence enhancing the diamond simulant. Techniques such as Raman spectroscopy should easily identify such a treatment.[89] Identification Early diamond identification tests included a scratch test relying on the superior hardness of diamond. This test is destructive, as a diamond can scratch diamond, and is rarely used nowadays. Instead, diamond identification relies on its superior thermal conductivity. Electronic thermal probes are widely used in the gemological centers to separate diamonds from their imitations. These probes consist of a pair of battery-powered thermistors mounted in a fine copper tip. One thermistor functions as a heating device while the other measures the temperature of the copper tip: if the stone being tested is a diamond, it will conduct the tip's thermal energy rapidly enough to produce a measurable temperature drop. This test takes about 2–3 seconds.[90] Whereas the thermal probe can separate diamonds from most of their simulants, distinguishing between various types of diamond, for example synthetic or natural, irradiated or non-irradiated, etc., requires more advanced, optical techniques. Those techniques are also used for some diamonds simulants, such as silicon carbide, which pass the thermal conductivity test. Optical techniques can distinguish between natural diamonds and synthetic diamonds. They can also identify the vast majority of treated natural diamonds.[91] "Perfect" crystals (at the atomic lattice level) have never been found, so both natural and synthetic diamonds always possess characteristic imperfections, arising from the circumstances of their crystal growth, that allow them to be distinguished from each other.[92] Laboratories use techniques such as spectroscopy, microscopy and luminescence under shortwave ultraviolet light to determine a diamond's origin.[91] They also use specially made machines to aid them in the identification process. Two screening machines are the DiamondSure and the DiamondView, both produced by the DTC and marketed by the GIA.[93] Several methods for identifying synthetic diamonds can be performed, depending on the method of production and the color of the diamond. CVD diamonds can usually be identified by an orange fluorescence. D-J colored diamonds can be screened through the Swiss Gemmological Institute's[94] Diamond Spotter. Stones in the D-Z color range can be examined through the DiamondSure UV/visible spectrometer, a tool developed by De Beers.[92] Similarly, natural diamonds usually have minor imperfections and flaws, such as inclusions of foreign material, that are not seen in synthetic diamonds.