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
Wed, Aug. 3, 7:25 AM
- Pretax earnings fell 45% from a year earlier, and the bank pulled its target of a 10% ROE by the end of next year, but HSBC is higher by 3.7% in London action after its capital return plans.
- The lender plans on returning half the equity freed up by the sale of its Brazil unit with a $2.5B buyback, and while many analysts had expected a cut in the $0.51 dividend, HSBC will maintain that level.
- HSBC's U.S. operation was approved to return "substantial" capital to the parent company, which could lead to another buyback, says Finance Director Iain Mackay.
Wed, Jul. 6, 11:10 AM
- Cashing out of stocks in one thing, but unloading that office building or shopping mall by the close of business is a different story. Henderson Global Investors suspends dealings in its £3.9B U.K. property fund, becoming the fourth such outfit to do so this week.
- The FTSE 100 (NYSEARCA:EWU) is lower by 1.45% ahead of the close, outperforming Europe once again, where most major markets are down 2% or more.
- That's in nominal terms, of course. The British pound (NYSEARCA:FXB) has taken out new three-plus decade lows, now down 1% vs. the dollar at $1.2892.
- Faring worst in the U.K. are the banks. RBS (RBS -7.7%), Lloyds (LYG -8.9%), Barclays (BCS -3.6%), HSBC (HSBC -1%).
Mon, Jun. 27, 9:44 AM
- Amid more gut-wrenching losses for U.K. banks, HSBC is outperforming by a mile with just a 4.5% decline today. Liking HSBC's "defensive" nature post-Brexit, JPMorgan's Kian Abouhossein upgrades to Neutral from Underweight.
- Alongside, he downgrades Lloyds (LYG -15.6%) and Barclays (BCS -20.5%) to Neutral from Overweight, and RBS (RBS -13.4%) to Underweight from Neutral.
- At issue for all U.K. banks, he says, is the likelihood the Bank of England cuts its benchmark rate to zero, further pressuring net interest margins.
Mon, Jun. 20, 11:02 AM
- Punished worse than most in the run-up to the Brexit referendum have been the British banks as London's financial center status is seen as highly vulnerable in the event the "leave" camp prevails.
- A weekend poll showing a sizable shift back to the "remain" camp has the FTSE 100 higher by 4.15%, with Barclays (BCS +7.9%), RBS (RBS +8%), and Lloyds (LYG +9.3%) leading the way. HSBC's (HSBC +3.5%) gain in more inline with the major average.
Tue, Jun. 14, 7:42 AM
- The Bank of England is offering the country's lenders extra liquidity to help them get through any volatility surrounding next week's Brexit vote. Banks today tapped the central bank for £2.46 of that cash.
- While that amount at repo auctions isn't unusual (they're held every month), the BoE is offering an extra three auctions in June - two before the vote and one after.
- The stock prices of British banks have been under heavy pressure ahead of the vote, and most are lower again today. In London trade: Barclays (NYSE:BCS) -2.9%, RBS -1.7%, Lloyds (NYSE:LYG) -1.9%, HSBC -1.15%.
- The FTSE 100 is down 1.2%, and the pound (NYSEARCA:FXB) is off 1% vs. the dollar.
- ETFs: FXB, EWU, GBB, EWUS, FKU, DXPS, DBUK, QGBR, HEWU
Wed, May 18, 10:31 AM
- A new poll shows the "remain" camp gaining strength, with an 18 percentage point lead roughly one month ahead of the Brexit referendum.
- The pound's higher by 0.9%, and the FTSE lower by 0.15%. Outperforming by a mile are the banks: Barclays (BCS +5.3%), RBS (RBS +6%), HSBC (HSBC +1.6%), Lloyds (LYG +4.6%).
Wed, Apr. 13, 9:16 AM
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).
Apr. 27, 2015, 7:14 AM
- As HSBC mulls moving its HQ out of the U.K., it is also considering a $20B spinoff of its British retail operation, according to The Sunday Times. The spin, say insiders, could speed up the bank's exit from the U.K.
- The board feels its hand is being forced by regulators' "ring-fencing" scheme, which forces lenders to put retail operations into separate companies with independent boards and chairmen.
- "If you can't control the retail arm, why would you hold shares in it," says one source. "You can control a commercial link, but there is no point."
- Shares +2.7% premarket
- Previously: HSBC launches review on whether to move headquarters (April 24)
Apr. 20, 2015, 12:04 PM
- "The ROE outlook for the European banks remains poor in our view," says Goldman. "Margins, impacted by monetary policy, are declining; the standalone cost-cutting opportunity has diminished; and provisioning leverage has played out."
- To boost returns, Goldman sees strategic, rather than operational improvements as required. Among the big players, HSBC (HSBC +1.7%) has the most to gain from strategic streamlining, says the team, adding the stock to its Conviction List.
- Pulled from the List to make room for HSBC is BBVA (BBVA -0.7%), whose rating has been downgraded to Neutral. Also part of the ratings changes, Bank of Ireland (OTCPK:IREBY -1.8%) is boosted to Neutral from Sell.
- Previously: HSBC higher after Goldman touch (April 20)
Apr. 20, 2015, 9:52 AM
- HSBC (HSBC +1.6%) is an outlier to the upside among the U.K. banks today after Goldman Sachs puts the previously Buy-rated stock on its Conviction Buy list.
Feb. 23, 2015, 9:14 AM
Feb. 23, 2015, 4:30 AM
- HSBC (NYSE:HSBC) -4.8% premarket after reporting that profits fell 17% to $18.7B in 2014, down from $22.6B the year before and below the average analyst forecast of $21B.
- The bank, which faced a significant number of fines and settlements last year, also cut its target for RoE to "more than 10%" from a previous target of more than 12%.
- "We deeply regret and apologize for conduct and compliance failures...which were in contravention of our own policies," added HSBC, addressing the allegations about tax evasion at its Swiss operations.
- HSBC chief executive, Stuart Gulliver, has been recently dragged into the tax-evasion scandal after it was claimed that he sheltered millions of dollars in a Panamanian company via its Swiss private bank.
Nov. 26, 2014, 6:32 PM
Sep. 19, 2014, 12:25 PM
- A check of European closing prices finds the euphoric early reaction to the "No" vote from Scotland mostly faded by day's end. The Stoxx 50 (NYSEARCA:FEZ) closed just 0.2% higher, with the U.K.'s FTSE 100 (NYSEARCA:EWU) gaining 0.3%.
- Looking at U.K. bank ADRs: RBS (RBS +1.2%), Barclays (BCS -0.9%), Lloyds (LYG +0.5%), HSBC (HSBC -0.2%).
- Dealing with its own separatist movement, Spain (NYSEARCA:EWP) managed just a 0.1% gain.
- Previously: Euro shares lean green on "No" vote
- Previously: Might Catalonia secession fears ebb following Scotland vote?
Sep. 9, 2014, 7:30 AM
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