HSBC Has A Lot Of Work Left To Do
Stephen Simpson, CFA
Stephen Simpson, CFA
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Stephen Simpson, CFA
Stephen Simpson, CFA
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).
Jul. 2, 2015, 9:08 AM
- Already with a presence in Turkey, ING was one of four lenders to submit a non-binding bid last month, reports Reuters, and HSBC has winnowed out the other three.
- With $15B in assets, HSBC is the 12th biggest bank in Turkey, but it's selling the unprofitable business as part of a global move to cut costs and reduce complexity. ING's existing Turkish bank has about $16B in assets. Individually, the banks lack the scale to make money, but combined, profitability is perhaps a possibility.
Jun. 26, 2015, 3:23 AM
- Winding down a five-year relationship, HSBC has ended its marketing tie-up on business activity surveys (including the closely watched China PMI) with financial information firm Markit (NASDAQ:MRKT).
- Neither gave a specific reason for the end of the partnership, but some industry insiders suspect it may have become too expensive and a potential political liability for HSBC.
Jun. 17, 2015, 11:30 AM
- While the OCC lifted consent orders against Bank of America (NYSE:BAC), Citibank (NYSE:C), and PNC Financial (NYSE:PNC) after finding unsafe and unsound mortgage-servicing and foreclosure practices back in 2011, Wells Fargo (NYSE:WFC) is part of a group facing new restrictions.
- Among other items, report Deon Roberts and Rick Rothacker, Wells Fargo is banned from entering new contacts to perform mortgage servicing for other lenders. The bank may still make and service new mortgages.
- OCC Deputy Controller Morris Morgan expects corrections from the group to be made in months, not years. “We have reserved the ability to take additional action against the six, and we plan to do so based on how quickly and effectively they remediate the remaining actions."
- The other five: JPMorgan (NYSE:JPM), HSBC Bank USA (NYSE:HSBC), Santander Bank (NYSE:SAN), U.S. Bank (NYSE:USB), and EverBank (NYSE:EVER)
Jun. 16, 2015, 2:25 AM
- HSBC (NYSE:HSBC) and JPMorgan (NYSE:JPM) are in discussions to relocate parts of their businesses to the Luxembourg as they weigh tougher rules for conducting business outside of the eurozone and the possibility of a British exit from the EU, The Times reports.
- According to the International Consortium of Investigative Journalists, more than 300 companies, including PepsiCo, AIG and Deutsche Bank, have already secured secret deals from Luxembourg to slash their tax bills.
Jun. 9, 2015, 7:35 AM
- The money-losing unit (for HSBC at least) is expected to sell for $3.2B-$4B, according to Bloomberg. Helping making Bradesco (NYSE:BBD) a more likely buyer than a foreign bank like Santander are the ease with which it could win approval and integrate the business.
- A purchase would add the country's 7th-largest bank to Bradesco's operation, but wouldn't be enough to push it past Itau Unibanco as Brazil's largest. Itau also made an offer for the HSBC operation, but - already being the nation's largest bank - had less interest than Bradesco.
- Previously: HSBC to cut thousands of jobs, slash billions from costs (June 9)
Jun. 9, 2015, 1:55 AM
- HSBC will cut costs by as much as $5B within two years, selling its units in Brazil and Turkey and laying off as many as 50K staff, Europe's biggest bank told investors in a much-anticipated update.
- In a statement to the Hong Kong Stock Exchange, HSBC said it would also shrink its risk-weighted assets by about $290B, including cutting its global banking and markets risk-weighted assets to less than a third of the group's assets.
- The bank will also target a ROE of more than 10% by 2017, down from a previous goal of 12%-15% by 2016.
- HSBC -1.2% premarket
Jun. 8, 2015, 1:01 PM
- Marzio Perrelli joined HSBC's Italian subsidiary in 2004 and became its CEO in 2008.
- The internal investigation ordered by HSBC Chief Legal Officer Stuart Levey is connected to a widely-reported corporate scandal involving the Generali insurance group, reports The Guardian, and Italian police are understood to have visited HSBC's offices in connection with their own probe.
- It's another issue for bank CEO Stuart Gulliver who tomorrow is set to present his plans to simplify and withdraw from a number of operations globally, and also to lay out framework for deciding whether to pull its HQ from London.
Jun. 2, 2015, 11:12 AM
- Itau Unibanco (NYSE:ITUB), Banco Bradesco (NYSE:BBD), and Banco Santander Brasil (NYSE:BSBR) have put in bids for HSBC's Brazilian operation, reports the WSJ, noting the process is still at an early stage and more bids could come in the next few weeks.
- A sale could come as soon as August, according to the Journal's sources.
- The unit is likely worth between $3.12B and $4.37B, according to a Deutsche analyst.
- Previously: HSBC confirms interest in selling Brazilian unit (May 22)
Jun. 2, 2015, 5:46 AM
- HSBC (NYSE:HSBC) has been ordered to face three U.S. lawsuits accusing it of breaching its duties as a trustee overseeing residential mortgage-backed securities that suffered more than $34B of losses during the financial crisis.
- The news follows a report yesterday which stated that HSBC is planning to announce massive layoffs next week. According to Sky News, the job cuts will total 10K-20K.
Jun. 1, 2015, 2:58 PM
- The precise number of job cuts set to be announced by HSBC CEO Stuart Gulliver is unclear, reports Sky News, but is likely to be in the 10K-20K range. Headcount as of year-end was 258K.
- Any job cuts do not include the impact of the sales of the bank's Brazilian and Turkish units, both of which are reportedly on the block.
- Also on investors' minds as Gulliver updates next week how the review for moving the bank's HQ out of the U.K. is going.
May 28, 2015, 2:30 AM
- The world's most popular sport was plunged into turmoil on Wednesday as U.S. authorities announced charges against nine FIFA officials and five sports executives, alleging they were part of a scheme in which more than $150M in bribes were paid in exchange for the commercial rights to soccer tournaments.
- The bribes were reportedly paid using accounts at major global banks, raising the prospect that Wall Street could be in the spotlight again over its involvement in yet another scandal. Banks involved: JPMorgan (NYSE:JPM), Citigroup (NYSE:C), HSBC, BofA (NYSE:BAC), UBS and Julius Baer (OTCPK:JBAXY).
- Nike, which also might be in the hot seat, said it would cooperate with authorities.
May 22, 2015, 7:44 AM
- HSBC CEO Stuart Gulliver in February said the bank's four problem businesses - Brazil, Mexico, Turkey, and the U.S. - needed to be improved or sold, thus setting the stage for the rumors.
- Reuters reports sales processes are underway in Brazil and Turkey, but the U.S. and Mexican operations are likely to be kept. Both are sizable businesses, but not among the top five lenders in either country.
- A preferred bidder for the Brazil unit could come next month as CEO Gulliver takes part in a strategy day on June 9.
- Source: Reuters
- Previously: Santander Brasil mulls purchase of HSBC's Brazil unit (May 19)
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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