HSBC Has A Lot Of Work Left To Do
Stephen Simpson, CFA
Stephen Simpson, CFA
Hong Kong Protests Offer An Interesting Opportunity On HSBC
HSBC Has A Valuable Core Franchise, But A Lot Of Work To Do
Stephen Simpson, CFA
Stephen Simpson, CFA
Nov. 4, 2013, 3:46 AM
- HSBC's (HBC) Q3 underlying pretax profit +10% to $5.1B, in line.
- Reported pretax profit +30% to $4.53B.
- Is co-operating with authorities in various countries in investigation into the possible manipulation of forex markets.
- Shares +0.9% in London. (PR)
Oct. 30, 2013, 12:45 PM
- Looking to get around a new EU law limiting bonuses, at least a dozen banks - including HBC, and BCS - are considering "role based" monthly allowances to make up for money previously given as annual performance rewards. The total annual pay and bonus won't change, but it would comply with the law.
- The new rule "clearly puts us at a competitive disadvantage to the American and Asian banks operating in our markets," says Richard Meddings, finance director at Standard Chartered (SCBFF). Not saying if his bank will pay these allowances, Meddings does say Standard Chartered "will continue to be very competitive with our staff."
Oct. 24, 2013, 1:19 PM
- Bank of England Governor Mark Carney continues to remake the U.K. central bank into something more "Fed-like." In a major speech and even more major break with his predecessor at the bank, Carney makes it clear the BOE will stand behind lenders facing liquidity issues and rejects the country's antipathy towards the sector.
- "If organized properly, a vibrant financial sector brings substantial benefits . . . The UK’s financial sector can be both a global good and a national asset ... The BOE today is the friend of resilient banks, continuous markets, and good collateral."
- "The Bank of England’s task is to ensure that the UK can host a large and expanding financial sector in a way that promotes financial stability."
- U.K. banks: BCS, RBS, HBC, LYG.
- The pound (FXB) has slipped about 20 pips since the speech was released.
- Webcast and press conference.
Oct. 20, 2013, 2:03 AM
- The $2.46B that HSBC (HBC) must pay to settle a case involving its Household International unit may not be the end of the matter.
- HSBC was told to pay the sum after Household was found to have misled investors about the quality of its loans and to have carried out predatory lending.
- However, the money doesn't account for 25,000 pending claims of over $650M, lawyers for the plaintiffs said.
Oct. 18, 2013, 4:51 AM
- HSBC (HBC) plans to appeal a U.S. court ruling that it pay $2.46B from a case involving Household International, the credit card and mortgage lender that the British bank bought in 2002 for $14B.
- Household lost a class-action lawsuit charging that it misled investors about the quality of its loans in 2001-02 - before the HSBC purchase - and thereby inflating its share price. Household was also accused of predatory lending.
Oct. 17, 2013, 3:38 PM
- Household International - now part of HSBC (HBC +0.5%) - had lost a class-action suit in 2009 accusing it of misleading investors about the quality of its loans in 2001-02. The firm was found to have hidden the fact that its growth came from predatory lending practices. The judgement was entered today, and Household is expected to appeal.
Oct. 17, 2013, 10:41 AM
- Part of its actions to exit noncore businesses globally, HSBC (HBC -0.1%) is closing down HSBC InvestDirect Securities (India). Opening of new accounts will stop immediately and existing clients will be notified of the discontinuation of service. The number of jobs affected hasn't been disclosed.
- The bank will continue to invest in a range of other financial services in India.
Oct. 6, 2013, 1:48 AM
- HSBC (HBC) is liable for about $1.5B in damages and interest after U.S. District Judge Ronald Guzman rejected the British bank's bid to quash a 2009 securities fraud verdict.
- The case relates to Household International, which HSBC bought in March 2003 for $15.5B. In 2002, Household shareholders sued the company, alleging that the firm and three senior managers misled them about its mortgage-lending practices.
Sep. 25, 2013, 4:36 AM
- The EU's top 42 banks need a further €70.4B ($95B) of capital to comply with Basel III core-capital regulations, the European Banking Authority estimates.
- By the end of last year, the combined gap had been cut by €29.1B compared with six months earlier.
- The rules, which are due to come into effect in 2019, require that banks hold a core-capital buffer of at least 7% of their assets on a risk-weighted basis.
- Banks will also need to maintain a leverage ratio of 3% of their total non risk-weighted assets from 2018. The shortfall for this requirement is €106.6B.
- Banks include: BCS, HBC, DB, LYG, RBS, SAN
- ETFs: AXFN, KBWX, IPF, IXG, EUFN
Sep. 16, 2013, 2:48 AM
- Starting today, tens of millions of U.K. consumers will be able to seamlessly switch banks within seven working days, down from 19-30 days until now.
- Banks have spent £750M ($1.2B) in preparing for the introduction of the new rules, in which they have to ease the process for customers to leave them. The project is being closely watched in the U.S., where banks have no obligations to assist customers if they want to switch banks, and could serve as a template for similar programs in America and elsewhere.
- The U.K. banks affected include HSBC (HBC), RBS (RBS), Lloyds (LYG) and Barclays (BCS), which hold 75% of of the market of 76M checking accounts.
Aug. 28, 2013, 9:22 AM
- Breaking in a big way with BOE policy under his predecessor, Mark Carney says those banks meeting the minimum 7% capital threshold will be able to reduce the level of required liquid asset holdings. He estimates this would lower total required holdings by £90B once all eight major banks get to 7%.
- The Q&A is beginning now.
- Earlier from Carney.
- BCS +2.5%, RBS +1.7%, LYG +1.8%, HBC -1% premarket.
Aug. 22, 2013, 3:32 AM
- The U.K.'s Financial Conduct Authority has reached a settlement of up to £1.3B ($2.04B) with banks, credit-card issuers and insurer CPP to compensate customers for mis-sold credit-card insurance.
- The firms involved include Lloyds (LYG), Barclays (BCS), HSBC (HBC), Morgan Stanley (MS), Santander (SAN), Capital One (COF) and RBS (RBS).
- The deal is dependent on customer and court approval.
- The agreement adds to the billions of pounds in fines that banks have paid for mis-selling other financial products. (PR)
Aug. 18, 2013, 11:23 AM
- "It is the very beginning of the downcycle in emerging markets for HSBC (HBC) and StanChart (SCDRF.OB), and the opposite for the rest of the UK banks," an analyst at Bernstein tells FT.
- The two banks — whose post-crisis pre-tax profits were a combined $66B through 2011 — may now fall behind the curve as their exposure to Asia becomes a drag amid tighter credit conditions and an acceleration in sour debt.
- Rising rates in the U.S. and other Western economies may reduce the incentive for investors to hunt for yield, exacerbating slowdowns in emerging markets.
- HSBC may be better hedged given its U.S. businesses. As for StanChart, here's Bernstein's Chirantan Barua: "When you have naked exposure, you get the best of times and the worst of times."
- See also: HSBC H1 results
Aug. 14, 2013, 8:48 AM
- HSBC's (HBC) fast fall over the past few sessions is a buying opportunity, says Bernstein's Chirantan Barua, upping the price target to $66.
- Behind the decline were impairment losses on its Latin American operations, notably Brazil and Mexico. Barua isn't worried, noting Latin America has been distressed since 2010 and HSBC has actively restructured its book there. Also, Brazil's NPL ratio has turned for the better in H1. Finally, the size of the bank's Latin American loan portfolio is less than 5% of the bank's overall book.
- HSBC's "earnings powers are yet to display the leverage that comes with a revival in global growth and a rise in rates in the Western world."
Aug. 9, 2013, 7:58 AM
- HSBC (HBC) names Stephen Williams head of capital financing for Asia Pacific.
- Williams will oversee the entirety of the firm's "capital markets and deal execution capabilities for the region," Reuters says.
- The move is part of a broader reorganization effort within the bank's global banking and markets division.
Aug. 6, 2013, 3:23 AM
- HSBC (HBC) faces having to pay $1.6B in a lawsuit from the Federal Housing Finance Agency over soured mortgage bonds that the bank sold to Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB). The bank made the disclosure yesterday.
- The figure is well above the $900M that analysts at Credit Suisse had estimated.
- In total the FHFA has sued 18 banks over mortgage bonds; should HSBC's calculations for its liabilities be applied to some of the defendants with the largest exposure, including Bank of America (BAC), JPMorgan (JPM) and RBS (RBS), they would have to pay over $7B each. Should these banks make payments in proportion with a recent UBS deal, the bill would above $4B.
HSBC Holdings Plc operates as a holding company. It provides banking and financial services through the following global businesses, including Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets and Global Private Banking. The Retail Banking and Wealth Management... More
Industry: Foreign Money Center Banks
Country: United Kingdom
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