HSBC Holdings Plc, which yesterday agreed to take over the Bank of Bermuda for $1.3 billion, is the world's second largest bank.

In terms of assets, earnings, and market capitalisation, it dwarfs Bermuda's largest bank.

The Hong Kong and Shanghai Banking Corporation - which was founded in 1865 in Hong Kong - has offices in Shanghai and London and an agency in San Francisco.

Until the 1950s, the bank grew "organically", becoming one of the most respected banking organisations in the Pacific Rim.

In 1959, it began a series of mergers that have turned it into one of the world's largest banking organisations, rivalling American rivals like Citigroup.

The bank's first major merger came in 1959 when it bought the British Bank of the Middle East and followed this deal with one six years later when it bought a majority shareholding in the Hang Seng Bank, now the second-largest bank in Hong Kong.

The next major merger came in 1980 when the bank acquired 51 percent of new York's Marine Midland Bank, giving it a major presence in the US.

Seven years later, in 1987, the bank took over the remaining shares in Marine Midland and took a 14.9 percent stake in the UK's Midland Bank. As with Marine Midland, the balance of Midland's shares would be bought out five years later.

By then, Hongkong and Shanghai Banking Corporation was no more; it was renamed HSBC Holdings Plc in a 1991 with joint listings on the London and Hong Kong Stock Exchanges. Two years later, the group's head offices were moved to London.

HSBC was listed on the New York Stock Exchange in 1999 after acquiring Republic New York Holdings and in Paris in 2000 when it bought CCF, one of France's largest banks.

This year, the bank took another major step when it bought US consumer finance company Household International, which has 53 million customers in the US.

Much of HSBC's growth has been driven by chairman Sir John Bond.

According to a recent article in The Banker, in 1961 (when Sir John first joined the bank) it had a market capitalisation of $154 million. Today its market capitalisation is $160 billion, second only to Citigroup.

The bank had net income in the 2003 financial year of $6.2 billion, a return on equity of 13.74 percent and a profit margin of 15 percent.

Still, HSBC's drive for growth has not been without risks. There were some concerns about its purchase of Republic New York Bank, and the Household acquisition saw HSBC increase its traditionally low provisions for bad debt.

But Sir John maintains the latter merger gives HSBC a foot in the door in a giant consumer market and that the same model can be used for emerging economies as consumer debt for cars, homes and credit cards are often the first steps for aspiring middle classes.

Asked about acquisitions, he said: "Our acquisition strategy is very heavily tilted towards buying client lists. We don't need the means of production, we've got a huge array of very smart, talented people.

"It is quite an interesting washing list we go through when we look at an acquisition target because we are looking at one every day at least. The first thing we do is acquire the client list. Is the technology compatible? Is the character, the human side compatible? Why is it worth more in our hands than in their hands? And finally we get down to price."

The Bank of Bermuda's expertise in wealth management, fund services and trusts gives it an enviable client list and that may explain HSBC's interest.