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
Apr. 29, 2014, 8:03 AM
- Among the severe scenarios under which U.K. bank balance sheets will be tested for are a 35% fall in house prices, a sharp rise in interest rates over three years to 4%, GDP slumping 3.5% below its current level, and an unemployment rate peaking at 12%.
- Among those subject to the test: HSBC, RBS, BCS, LYG.
- The exams are being run alongside European-wide stress tests, with results expected to be published in Q4.
- Even banks who "pass" the test could be requested to boost their capital, warns the BOE.
Apr. 7, 2014, 1:13 PM
- Nine months ago, the European Commission accused 13 banks of blocking Deutshce Boerse (DBOEY) and CME from entering the lucrative CDS business between 2006-09, but the banks, reports Reuters, are set to fight those charges at a closed-door hearing next month.
- Should they lose, the banks could be subject to fines of up to 10% of their global CDS turnover - not a small amount given the size of the market.
- Those charged and expected to fight: C, GS, DB, BAC, BCS, BNPQY, CS, HSBC, JPM, MS, RBS, and UBS.
Apr. 1, 2014, 12:17 PM
- Compliance monitor Michael Cherkasky believes HSBC is "appropriately committed" to improving its anti-money-laundering program, but found the systems "lack integration, coordination, and standardization."
- HSBC agreed to the monitoring and regular reporting as part of its late-2012 $1.9B settlement over money-laundering violations. Today's report is the first one filed.
- Cherkasky recommends the bank develop global strategy and implementation plans, with timelines and accountability provisions, suggesting the compensation committee have the power to dock 100% of senior executives' bonuses if they fail to develop an effective program. The filing says HSBC agreed "in principle" with most of the recommendations.
- HSBC has already spent plenty on compliance, boosting staff in the are by 1.6K in 2013. It looks like it will have to spend plenty more.
Apr. 1, 2014, 4:43 AM
- A group of investors from across the U.S. and Caribbean have filed a class-action lawsuit against 12 banks for allegedly colluding to manipulate currency rates.
- The firms being sued include Bank of America (BAC), Barclays (BCS), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), HSBC (HSBC), JPMorgan (JPM), Morgan Stanley (MS) and RBS (RBS).
- The investors include city and state pension plans such as the City of Philadelphia and the State-Boston Retirement System.
- The suit adds to multiple investigations by international authorities into forex manipulation, the latest being the Hong Kong Monetary Authority.
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