Aug. 5, 2014, 7:18 AM
- Moody's view of the sector is downgraded to "negative" from "stable," suggesting ratings cuts could be in the offing. At issue are new rules designed to prevent the use of taxpayer funds to rescue struggling operators.
- Also of note, says Moody's analyst Carlos Suarez Duarte, is continued exposure to both conduct and litigation charges."
- Those with negative outlooks include: LYG, BCS, RBS, HSBC.
Aug. 4, 2014, 7:50 AM
- Pretax earnings of $12.3B fell 12% from a year ago and came in shy of analyst estimates of $12.9B. Revenue of $31.2B fell 9.3%.
- Underlying operating expenses of $18.2B gained 2%, bringing costs as a proportion of revenue of 58.6% from 53.5%, higher than the bank's mid-50s target.
- The global banking and markets unit saw revenue of $5.03B, off 12%, "respectable in a broader industry context," says Investec's Ian Gordon.
- Expecting improvement in revenue in 2015," CEO Stuart Gulliver says gains should be lagged six months after rates begin to turn up.
- HSBC +2.2% premarket
- Press release
Aug. 3, 2014, 10:28 AM
- Wall Street firms led by Goldman Sachs (NYSE:GS) are closing in on a deal to purchase a stake in chat and instant messaging start-up Perzo as an alternative to Bloomberg's similar application, Reuters reports.
- Bloomberg has dominated Wall Street for years, but banks have been looking for a substitute as sluggish trading volumes and higher regulations weigh on revenues. Bloomberg's trading and news terminal costs about $20,000 a year, while Perzo's applications are open-source and free. Bloomberg customers must also buy an entire terminal, and cannot just buy the messaging system and adapt it.
- Several other banks and asset managers have received term sheets for the Perzo deal and have recently signed non-disclosure agreements including Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Deutsche Bank (NYSE:DB), HSBC (NYSE:HSBC), and BlackRock (NYSE:BLK).
- Goldman has been looking at alternatives to Bloomberg's messaging program for years, and launched a project internally called "Babel" in early 2013 to develop a competitor.
Jul. 25, 2014, 8:03 AM
Jul. 17, 2014, 4:54 AM
- Prior to its takeover of European bank supervision on November 4, the ECB will release collections of data on the euro zone's 128 most important lenders to insure the banks can withstand future crises.
- The published review in the second half of October will outline leverage measures, standardized ratios of non-performing loans and other statistics, giving the banks only two weeks to come up with plans to deal with capital shortfalls.
- Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
- ETFs: EUFN
Jul. 10, 2014, 9:44 AM
- When the going gets tough, the tough suspend trading. Portugal has halted trade in Banco Espirito Santo with the stock off 17.2% on the session and 54% over the last month. At issue are financial troubles for the bank's privately-owned holding company, Espirito Santo International. Its accounts are currently under review by an external auditor who has identified irregularities and concluded the company "is in serious financial condition."
- Santander (SAN -5.8%), UBS (UBS -1.8%), Deutsche Bank (DB -3.1%), Bank of Ireland (IRE -5.6%), Credit Suisse (CS -2.8%), ING (ING -3.2%), BBVA (BBVA -3.1%). U.K. banks: Barclays (BCS -3.8%), RBS (RBS -1.9%), HSBC (HSBC -1.9%), Lloyds (LYG -2%).
- European financial sector ETF: EUFN -2.4%.
Jun. 24, 2014, 11:26 AM
- Citigroup (C), HSBC North America, RBS Citizens, and Santander Holdings U.S.A. (SAN) were originally required to re-submit capital plans by the end of business on Thursday, but - following requests from the banks - the Fed is giving them until January 5 of next year, the due date for the next round of annual plans for all of the lenders under the CCAR umbrella.
- Previously: Passing next stress test is job #1 at Citi
Jun. 24, 2014, 8:02 AM
- HSBC's private bank will now service customers in about 70 countries down from roughly 150, with most of the reduction coming from the sale of $12.5B of its Swiss private banking assets to Liechtenstein's biggest bank, LGT Group Foundation.
- The sold assets amount to about 3% of the bank's private banking assets and were held by clients in dozens of countries HSBC no longer deems strategically important.
- Wealth management can be lucrative, but a recent clampdown on tax evasion and tougher compliance rules have maybe made it less so. Barclays last year pulled out of 130 countries and Credit Suisse from about 50.
Jun. 24, 2014, 5:43 AM
- Iran is lobbying to get HSBC to process its humanitarian trade transactions, which the bank froze due to the scope of international sanctions.
- Although the country did obtain some sanction relief last November after agreeing to downsize its nuclear program, banks are growing increasingly worried over stepping out of line.
- The move follows a potential $9B fine imposed on BNP Paribas, which is being investigated for avoiding sanctions between 2002 and 2009.
- Sanctions on the Islamic Republic never included food or humanitarian goods, although the EU and U.S. have made payment, shipping and transactions harder to process in the last two years.
Jun. 18, 2014, 5:02 PM
- The trustee units of Detusche Bank (DB), U.S. Bancorp (USB), Wells Fargo (WFC), HSBC, and Bank of New York Mellon (BK) face a lawsuit by an investor group led by BlackRock (BLK) and Pimco (and also including PRU and SCHW) over their role in overseeing and enforcing terms on more than 2K mortgage-backed bonds between 2004 and 2008.
- The group is seeking damages for losses on the paper that have surpassed $250B, reports the WSJ. At issue, say the plaintiffs, is the banks breaching their duty to bondholders by failing to force the lenders and bond issuers to repurchase poorly underwritten loans.
- A similar plaintiffs group has already won settlements from Bank of America and JPMorgan for their roles in originating and selling toxic mortgages.
Jun. 12, 2014, 7:51 AM
- In the next several weeks, the Supreme Court is expected to rule on a case involving a shareholders' class action lawsuit against Haliburton (HAL). If it rules in favor of the company, it will set a higher bar for plaintiffs to achieve class certification. Currently, a judge holds a certification hearing to decide whether class status is appropriate. One criterion is that the people must have common issues. If HAL prevails, then the defendants will be able to file a brief with the court demanding that the shareholders have to again seek court approval for class status under a new, tougher standard. If they fail the gain the approval, the case ends.
- HAL is trying to overturn a 1988 decision, Basic v. Levinson, which is based on "fraud on the market theory," which postulates that a defendant's material misrepresentation that affects the price of publicly traded securities is assumed to have been relied upon by a buyer who suffered a loss. In HAL's case, shareholders alleged that it understated its asbestos liabilities while overstating revenues and the benefits of its merger with Dresser Industries.
- Other firms facing class action suits that would benefit from a favorable ruling are Pfizer (PFE), Merck (MRK), HSBC Holdings Plc (HSBC), Regions Financial (RF) and Las Vegas Sands (LVS).
Jun. 11, 2014, 8:06 AM
May 27, 2014, 7:38 AM
- Feeling its oats after getting Credit Suisse to plead guilty to tax evasion, the DOJ looks set to quicken the pace on investigations of 13 others Swiss lenders, including the Swiss unit of HSBC. Of the 13 under the scope, only HSBC has substantial U.S. operations.
- “It looks like DOJ has a plan in certain cases where they can get a guilty plea but not destroy the bank,” says former IRS deputy commissioner Mark Matthews. “I’m sure that any bank confronted with that can hardly take comfort.”
May 23, 2014, 12:12 PM
- A last-ditch effort by HSBC to hold off a revolt on executive pay by cutting the chairman's bonus proves little help as more than 20% of votes cast at the annual meeting today were against the bank's three-year pay policy.
- Among the issues is the bank's policy on granting fixed pay "allowances" as a way of getting around a new EU bonus cap. Unlike other lenders, HSBC hasn't capped these allowances, but instead made them variable to reflect the size of bonus schemes.
- Sir Simon Robertson - the head of HSBC's pay committee - notes the bank is paying less than U.S. rivals like JPMorgan and Citigroup even as it tries to compete with them.
May 20, 2014, 8:19 AM
May 7, 2014, 9:16 AM
- HSBC Holdings net profit of $5.2B falls from $6.4B a year ago. Underlying revenue of $15.7B off 8%. Underlying costs up 2% as higher compliance costs win out over trims elsewhere.
- Investment banking pretax profit off 20%. FICC (slowing throughout the industry) accounts for 25% of unit's revenue.
- Asian pretax profit off 32%, at least some of that due to a $1.8B gain from Ping An and Industrial Bank a year ago. HSBC says April activity has been "muted."
- Shares -1.2% premarket
- Press release
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