HSBC Has A Lot Of Work Left To Do
Stephen Simpson, CFA
Stephen Simpson, CFA
Hong Kong Protests Offer An Interesting Opportunity On HSBC
Dec. 25, 2015, 4:50 AM
- Commerzbank (OTCPK:CRZBY) is suing four banks in the U.S., claiming that they failed to properly monitor billions of dollars in toxic MBSs acquired by the German lender before the 2008 financial crisis.
- BNY Mellon (NYSE:BK) and units of Deutsche Bank (NYSE:DB), Wells Fargo (NYSE:WFC) and HSBC (NYSE:HSBC) were named in the lawsuits.
Dec. 1, 2015, 3:28 AM
- All U.K.-based banks have passed the country's annual stress tests, which measure the British banking sector's ability to handle global financial shocks.
- Although none of the lenders will be required to submit a revised capital plan, StanChart (OTCPK:SCBFF) and RBS only passed the exam after taking steps to improve their capital ratios during the testing process.
- Other banks included in the exercise: HSBC, Barclays (NYSE:BCS), Lloyds (NYSE:LYG), Santander (NYSE:SAN) and Nationwide.
Nov. 9, 2015, 4:24 AM
- The Financial Stability Board has published new rules that aim to stop banks from becoming "too big to fail," confirming its final proposals for Total Loss Absorbing Capacity, or TLAC.
- Under the plan, large lenders will have by January 2019 to hold a financial cushion of at least 16% of their risk-weighted assets in equity and debt that can be written off. That requirement will gradually increase, reaching 18% of assets weighted by risk by January 2022.
- The FSB will put the rules, which will apply to the world's top 30 banks, to the G20 later this month.
Nov. 2, 2015, 1:55 AM
- HSBC (NYSE:HSBC) beat expectations for third-quarter profits in spite of China's stock market collapse denting revenues, as the bank benefited from lower regulatory costs and reassured investors about its Asian loan portfolio.
- Pre-tax profit at Europe's largest lender jumped 32% to $6.1B, topping forecasts of $5.2B, although revenue dropped 4% to $14B.
- HSBC also did not give any further details on its domicile review, which began in April, but warned the year-end deadline it had imposed could slip.
Oct. 28, 2015, 2:48 AM
- HSBC (NYSE:HSBC) has begun transferring billions of dollars worth of derivatives trades from London to Hong Kong to take advantage of the city's regulatory environment, and to help position itself for a potential relocation of its headquarters, Reuters reports.
- The development comes as a slew of tougher rules brought in after the 2008 financial crisis make it increasingly expensive for banks to trade derivatives in the U.S. and Europe.
- Previously: HSBC shifts more investment to Asia (Sep. 21 2015)
Oct. 16, 2015, 4:43 AM
- According to new U.K. rules, Britain's biggest banks will have to hold up to £3.3B of extra capital between them when they are forced to ringfence their investment banking operations in 2019.
- The Bank of England's regulations are also allowing "ringfenced" banks to transfer capital from their retail arms to other parts of their businesses in the form of dividends, a move loudly applauded by the U.K.'s largest lenders.
- Related tickers: RBS, HSBC, LYG, BCS, SAN
Oct. 15, 2015, 2:57 AM
- Staff at HSBC's (NYSE:HSBC) investment banking unit in London have been ordered to take a 10% pay cut and two weeks of unpaid leave by the end of the year, The Times reports.
- Under intense pressure to reduce costs, the bank broke the news to staff last week and instructed managers that there would be "0% exceptions."
- HSBC previously unveiled a three-year plan in June aimed at lowering headcount by 50K and cutting annual costs by as much as $5B.
Oct. 5, 2015, 3:31 PM
- The Street has priced in earnings declines for pretty much every sector, but Q3 and Q4 estimates for the financials have barely budged, and consensus sees Q3 results 10% above that of a year ago.
- Morgan Stanley's Huw van Steenis, however, sees FICC revenue declines of 10-25% - far more than the 5% or so that's been talked about by bank managements at recent investor conferences - as the commodity price crash combines with collapsing fixed-income trading, and the lack of volatility in forex action.
- With just $20B in FICC revenues, says van Steenis, Q3 is shaping up to be the second worst quarter for banks in the last two years. Leaving his own bank (NYSE:MS) out of the analysis, he sees FICC revenue declines of 17% at JPMorgan (NYSE:JPM), 9% at Goldman (NYSE:GS), and 6% at BofA (NYSE:BAC) and Citi (NYSE:C).
- Bottom line: "On EPS, we are 4% below consensus on average across our coverage for 2015, and 5% below for 2016. The biggest delta is for Barclays (NYSE:BCS), BNP Paribas (OTCQX:BNPQY), and Goldman in 2015, and SocGen (OTCPK:SCGLY), HSBC, and BNP in 2016."
- Source: ZeroHedge
Oct. 1, 2015, 5:11 PM
- JPMorgan Chase (NYSE:JPM) will pay almost a third of a $1.86B settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit default swaps market, Bloomberg reports.
- JPM reportedly will pay $595M, followed by Morgan Stanley (NYSE:MS) with $230M, Barclays (NYSE:BCS) at $175M, Goldman Sachs (NYSE:GS) at $164M, Credit Suisse (NYSE:CS) at $160M and Deutsche Bank (NYSE:DB) at $120M; BofA (NYSE:BAC), BNP Paribas (OTC:BNPZY), UBS, Citigroup (NYSE:C), Royal Bank of Scotland (NYSE:RBS) and HSBC would pay less than $100M each.
- The deal would avert a trial and end years of litigation by hedge funds, pension funds, university endowments, small banks and other investors, who sued as a group.
Sep. 21, 2015, 7:05 AM
- HSBC (NYSE:HSBC) plans to add 4K staff in China’s Pearl River Delta region over the next 3-4 years to grab retail banking and wealth management business.
- The figures amount to a 30% increase from 13K employees in the region and contrast with the bank's three-year plan to cut global headcount by some 50K and reduce annual costs by up to $5B.
Sep. 2, 2015, 4:28 AM
- Argentina's central bank has ordered HSBC's (NYSE:HSBC) local unit to name a new president and vice president within 24 hours, accusing the institution of failing to establish necessary controls to prevent tax evasion and money laundering.
- Last November, Argentine authorities charged the bank with helping more than 4,000 clients dodge taxes via Switzerland. Although HSBC rejected the accusation, Argentina said it wanted HSBC to repatriate the $3.5B it allegedly moved offshore.
- HSBC -0.4% premarket
Aug. 14, 2015, 2:07 AM
- Five more banks have agreed to settle U.S. investor lawsuits tied to a global currency-rigging scandal, which claimed the institutions conspired to manipulate the $5.3T-a-day foreign-exchange market.
- HSBC (NYSE:HSBC), Barclays (NYSE:BCS), Goldman Sachs (NYSE:GS), BNP Paribas (OTC:BNPZY) and Royal Bank of Scotland (NYSE:RBS) now join a list of nine firms which previously settled the class actions, bringing the total amount investors have recovered to $2B.
Aug. 3, 2015, 3:00 AM
- In another retreat from the emerging markets, HSBC (NYSE:HSBC) declared it would sell its Brazilian business to Bradesco (NYSE:BBD) for $5.2B, after years of feeble performance.
- The news came with the bank's second-quarter results. Profit for the period fell 4% to $4.4B as HSBC continued to overhaul its operations in an effort to cut billions in annual costs by the end of 2017.
Jul. 31, 2015, 4:49 PM
- HSBC is near a deal to unload its Brazilian unit to local bank Bradesco for nearly $4B (close to book value), the FT reports. It adds HSBC hopes to announce the deal on Monday, when Q2 results arrive.
- Reuters reported earlier this month HSBC is set to sell its Turkish bank to ING, as it continues slashing costs and streamlining its operations. The FT also reports of talks with ING, while stating that deal might not be completed in time to be announced on Monday.
Jul. 24, 2015, 4:52 AM
- U.S. authorities have now initiated investigations into whether banks should have raised alarms about money flows linked to alleged corruption at FIFA.
- Prosecutors have questioned lenders, including HSBC (NYSE:HSBC), Standard Chartered (OTCPK:SCBFF), Delta National Bank (OTCPK:DEBC) and Trust Company in connection with the soccer scandal.
- The probes could also create a headache for the financial industry over its money-laundering controls, which are increasingly under the regulatory microscope.
Jul. 8, 2015, 8:40 AM
- Unveiling the summer budget, U.K. Chancellor Osborne says the government will gradually phase out the bank levy over the next six years, replacing it with a new 8% surcharge on profits. The difference? The new charge applies only to U.K. assets, while the bank levy applied to global balance sheets.
- Osborne may have made the change in response to threats from banks to leave the U.K. because of the levy (which Osborne increased 50% in the last budget).
- The FTSE 350 banking index is higher by 1.6% following the news. Watching with interest: HSBC, RBS, Barclays (NYSE:BCS), Lloyds (NYSE:LYG), Standard Chartered (OTCPK:SCBFF).
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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