HSBC Has A Lot Of Work Left To Do
Stephen Simpson, CFA
Stephen Simpson, CFA
Hong Kong Protests Offer An Interesting Opportunity On HSBC
Mon, Sep. 26, 2:30 AM
- Kicking off a search for future executives, HSBC has hired recruitment firm Russell Reynolds to assess the strength of its most promising managers and benchmark them against the best rivals externally, FT reports.
- The move comes amid mounting speculation about the likely replacements for HSBC's current chairman Douglas Flint and CEO Stuart Gulliver, who are expected to hand over the reins next year and in 2018, respectively.
Fri, Sep. 23, 6:41 AM
- HSBC is looking to release billions of dollars of capital tied up in the U.S. without upsetting the country's politicians and regulators, Reuters reports.
- The bank, which has been on the radar after breaching anti-money laundering rules, has more than $20B of American capital earning a paltry 1% return, of which up to half could be returned to the holding company via asset sales, according to analysts and investors.
Mon, Sep. 12, 6:32 AM
- Spencer Lake is set to leave HSBC after an "instrumental" 10-year stint culminating in a role as vice-chairman of global banking and markets.
- Earlier this year, HSBC hired senior Goldman Sachs banker Matthew Westerman to become co-head of banking. The business was subsequently reorganized, with Lake becoming vice-chair of GBM.
- HSBC -2% premarket
Wed, Sep. 7, 3:24 AM
- U.S. prosecutors are considering criminal charges against HSBC Holdings (NYSE:HSBC), upending an earlier deal that let the bank avoid prosecution.
- The new investigation could lead to a step that has often been threatened but rarely taken: prosecutors tearing up a deferred-prosecution agreement if a company fails to comply with the reform plan laid out by the Justice Department.
- HSBC paid a record $1.9B in 2012, and agreed to cooperate with Justice Department probes for five years, thereby avoiding criminal charges which could damage its reputation more than a fine.
Mon, Sep. 5, 10:22 AM
- HSBC business customers can now open new accounts by taking a selfie to verify their identity.
- A mobile app uses facial recognition software to take a headshot of a customer, which is then compared against a photo ID, such as a driver's license or passport.
- The change is intended to simplify and speed up the process of opening a new account and reflects the increasing tendency of customers to open accounts online.
Wed, Aug. 31, 5:40 AM
- HSBC's (NYSE:HSBC) dividend is safe this year and next, Deutsche Bank says in a note.
- Firm notes, however, that HSBC is overdistributing capital relative to earnings; needs to grow into its dividend burden.
- Cash released from underperforming businesses (e.g. Brazil) is is plugging the dividend gap this year,
- Half of HSBC’s capital is delivering ROE of just 1-2%. Causes are mostly structural, not cyclical. Capital allocation strategy needs to change.
- Sees potential to free up more of the ~$33B in capital allocated to operations in North America that has ROE of just 1-2%.
Mon, Aug. 29, 12:50 PM
- HSBC's global head of foreign exchange, Mark Johnson was arrested at Kennedy airport last month as he was about to get on a plane for London. Along with the bank's former head of currency trading in Europe - Stuart Scott - he's been charged with manipulating the pound for profit.
- The case is noteworthy as the two are the first to be criminally charged in the U.S. over the long-running investigation.
Mon, Aug. 15, 10:49 AM| Mon, Aug. 15, 10:49 AM
Wed, Aug. 3, 8:57 AM
Wed, Aug. 3, 7:25 AM
- Pretax earnings fell 45% from a year earlier, and the bank pulled its target of a 10% ROE by the end of next year, but HSBC is higher by 3.7% in London action after its capital return plans.
- The lender plans on returning half the equity freed up by the sale of its Brazil unit with a $2.5B buyback, and while many analysts had expected a cut in the $0.51 dividend, HSBC will maintain that level.
- HSBC's U.S. operation was approved to return "substantial" capital to the parent company, which could lead to another buyback, says Finance Director Iain Mackay.
Wed, Aug. 3, 2:03 AM
- HSBC cast doubt over reaching its profitability targets after first half earnings tumbled 29% on year - just shy of expectations - due to a slowdown in its key markets of Britain and Hong Kong.
- Societe Generale (OTCPK:SCGLY) and Credit Agricole (OTCPK:CRARY) beat estimates, however, reporting a jump in Q2 net profit helped by a gain from their stake sales in Visa Europe.
Tue, Jul. 26, 1:37 PM
- "Banks are figuring out that providing every product and every service to every client in every country was just wrong," says former Citigroup (NYSE:C) CEO Vikram Pandit, who used to tout his bank's "globality." Prior to the financial crisis, Citi had 268M customers, and today - after selling or shutting down retail operations across the globe, cutting its U.S. branch network by two-thirds, exiting subprime lending, student loans, and life insurance - has lost about 25% of its customers (along with more than 40% of its workforce).
- "We're not close to being done," says Pandit.
- Similar changes have taken place at HSBC, which actually had an even larger global footprint than Citigroup. For its part, the bank's been using six "filters" to determine whether it needs to exit certain locations or businesses. Among them are profitability, efficiency, and risk of financial crime.
- So far, the cuts haven't manifested themselves in increased profitability. ROE at both lenders remains low (8% for C, 7% for HSBC; both were 16% pre-crisis). And it hasn't stifled calls to break up the big banks.
- Source: Bloomberg's Yalman Onaran
Wed, Jul. 20, 10:37 AM
- HSBC global head of foreign exchange cash trading, Mark Johnson is the first individual charged in the DOJ's three-year probe of forex rigging at global banks.
- He was arrested as he was preparing to fly out of NYC's Kennedy airport late yesterday (he works in both London and New York).
- Johnson is to appear before a judge this morning, and will be charged with conspiracy to commit wire fraud involving front-running clients, reports Bloomberg.
- In related news, the Fed yesterday banned former UBS trader Matthew Gardiner from the banking industry for life for his role in forex rigging. He's cooperating with prosecutors as they build cases against others.
Wed, Jul. 6, 11:10 AM
- Cashing out of stocks in one thing, but unloading that office building or shopping mall by the close of business is a different story. Henderson Global Investors suspends dealings in its £3.9B U.K. property fund, becoming the fourth such outfit to do so this week.
- The FTSE 100 (NYSEARCA:EWU) is lower by 1.45% ahead of the close, outperforming Europe once again, where most major markets are down 2% or more.
- That's in nominal terms, of course. The British pound (NYSEARCA:FXB) has taken out new three-plus decade lows, now down 1% vs. the dollar at $1.2892.
- Faring worst in the U.K. are the banks. RBS (RBS -7.7%), Lloyds (LYG -8.9%), Barclays (BCS -3.6%), HSBC (HSBC -1%).
Tue, Jul. 5, 6:21 AM
- The Bank of England has taken steps to shore up the U.K. economy following Britons' decision to exit the EU, warning that the outlook for the stability of the financial system has become "challenging."
- The decision to reduce the so-called countercyclical capital buffer to zero will allow British banks to lend an extra £150B to U.K. businesses and households, keeping the economy flush with credit.
- Related tickers: BCS, HSBC, SAN, AV, PUK, OTCPK:TSBBY, OTC:SLFPF, OTCPK:LGGNY
Mon, Jul. 4, 3:42 AM
- After receiving all the necessary regulatory approvals, HSBC has completed the sale of its entire business in Brazil.
- The transaction is expected to decrease group risk-weighted assets by around $37B and increase the group's common equity tier 1 ratio by around 65 bps.
- HSBC previously confirmed the deal was worth $5.2B in an all-cash transaction.