Mar. 20, 2014, 10:35 AM
- The results of the Fed stress tests on the usual banking industry suspects are expected today, but this year's version includes 12 new companies added to last year's list of 18. Newly subjected U.S.-based lenders: DFS, NTRS, HBAN, MTB, ZION. Foreign-owned U.S. bank holding companies: BBVA Compass Bancshares, BMO Financial, HSBC N.A. Holdings, RBS Citizens Financial Group, Santander Holdings USA (SAN), UnionBanCal (MTU).
- The CCAR results - at which the Fed will give a thumbs up/thumbs down on banks' capital return plans - are due on March 26.
Mar. 14, 2014, 3:07 PM| 33 Comments
Mar. 5, 2014, 10:40 AM
- New York resident Kevin Maher files suit against the five banks who set the London gold fix each day, accusing them off price manipulation. The five: Deutsche (DB), Barclays (BCS), Scotiabank (BNS), HSBC, and SocGen (SCGLY).
- The setting of the benchmark occurs twice a day in a teleconference through something resembling open-outcry. There are, of course, a number of investigations ongoing about illegal manipulation, and an academic study has found what it deems to be good evidence of collusion in the afternoon fix.
Mar. 4, 2014, 11:08 AM
- Boston-based Charles River Associates was hired by Deutsche Bank (DB +1.7%) several months ago, reports the WSJ, to assess the extent of the bank's participation in the alleged rigging of the London gold fix.
- Gold is traded around the clock, but there is no central source for prices, and a group of five meets twice a day in London to determine a snapshot, or fix. Other than Deutsche, the others are Barclays (BCS), HSBC, Scotiabank (BNS), and SocGen (SCGLY).
- Deutsche last month announced its exit from the group, and Standard Chartered (SCBFF) reportedly is the front-runner to replace it.
- Last week: A draft research paper finds strong evidence of mischief.
Feb. 25, 2014, 8:55 AM
Feb. 24, 2014, 8:49 AM
- With HSBC the last of the major banks to report earnings, inquiring minds want to know whether the lender is feeling the pain of the selloff in emerging markets. The answer is no, according to CEO Stuart Gulliver who calls the jitters due to "specific circumstances," and not a "generalized threat."
- Nevertheless, earnings missed expectations. Among the issues:
- Costs. 40K job cuts in three years may not be enough. Excluding the money laundering charges, expenses in 2013 actually went up thanks to compliance, wages, and litigation costs.
- Bonus confusion. Winding its way around new EU bonus rules, HSBC introduces a "fixed pay allowance" and designated some of the staff "material risk takers." Referring to this new structure, Gulliver says "we would prefer not to do this."
- Complicated business. HSBC blames part of the earnings miss on one-offs like the bank levy - essentially a tax on the size of the bank's balance sheet. But good luck trying to figure out the effect - depending on which exec you talk to, the levy cost anything from $321M to "over" $450M.
- Previous earnings coverage
- Shares -3.1% premarket
Feb. 24, 2014, 4:39 AM
- HSBC's (HSBC) 2013 pretax profit rose 9% to $22.56B but fell short of consensus of $24.6B.
- Underlying revenue grew to $63.3B from $61.6B, while underlying operating costs dropped 6% to $38B.
- Q4 pretax profit fell to $3.96B from $4.43B a year earlier.
- HSBC increased its dividend to $0.49 a share from $0.45.
- However, the bank warned of "choppy markets" this year as emerging economies adjust to "changing economic circumstances and sentiment."
- Shares are -4.2% in London. (PR)
Feb. 23, 2014, 2:20 AM
- HSBC (HSBC) is set to disclose that it will pay staff bonuses of just under $4B when it releases its full-year results this week, Sky News reports.
- The amount will represent a rise from $3.69B for 2012.
- FY underlying pre-tax profits at HSBC are forecast to have increased to $22.2B from $18.8B, Standard Chartered analysts have said.
- HSBC is also expected to disclose a significant impairment charge in connection with its Mexican operations.
Feb. 16, 2014, 2:18 AM
- Bank of America (BAC) and HSBC (HSBC) have agreed to settle lawsuits that borrowers filed over force-placed property insurance that the banks required them to buy.
- However, there were no details about how much the firms will have to pay.
- The borrowers argued that BofA and HSBC agreed to deals with insurance companies and over-charged for the coverage.
- The deals come after JPMorgan agreed to pay $300M and Citigroup $110M over the same issue.
Feb. 12, 2014, 3:13 PM
- There have been a number of suits against the global banks over claims of forex manipulation, but this latest by the City of Philadelphia Board of Pensions and Retirement is the first to include research highlighting unusual movements in major currencies.
- Using data compiled by Fideres, the plaintiffs analyzed daily trading right around the 4 PM fix of currency prices ... curiously, anomalous price movements became rarer and less pronounced after the initial reports of rigging surfaced last summer.
- Morgan Stanley has spent some time looking at euro/dollar spikes at 4 PM and also concluded they were unrelated to economic events. Instead of collusion though, Morgan pins the blame on computerized trading programs.
- The seven banks sued by Philadelphia which is seeking damages as high as $10B: Barclays (BCS), Citigroup (C), Deutsche Bank (DB), HSBC, JPMorgan (JPM), RBS, and UBS.
Feb. 12, 2014, 7:45 AM| Comment!
Feb. 3, 2014, 11:25 AM
- Wells Fargo (WFC -1.1%) added $4.2B in brand value in 2013 to reach a total of $30.2B, according to Brand Finance. Boosting Wells vs. competitors is its lack of association with the string of legal settlements and investigations over the past years (though Wells isn't free of these). Coming in second is the U.K.'s HSBC at $26.9B.
- In third place, but showing a big gain in brand value over the past year is Bank of America (BAC -1.3%), which added $4.3B to $26.7B. Dropping to fifth place from second after losing a couple of hundred million in brand value is the Bank of Dimon (JPM -1.4%), no doubt stung by a seeming ceaseless string of legal actions against it.
- Full list
Jan. 30, 2014, 7:59 AM
Jan. 24, 2014, 7:27 AM
- What was the CEO of a company you're an owner of up to this week? An index of companies whose execs regularly attend Davos has vastly underperformed the market since 2009.
- Attendance at the gathering tends to be dominated by the financials, with GS, C, HSBC, JPM, LAZ, MS, SCBFF, BAC, ITUB, and UBS leading the way to prove their bona fides as thought leaders. Also spotted were the heads of DOW, and PEP.
- Notably absent: Buffett (BRK.A, BRK.B) , Tim Cook (AAPL) (Jobs never attended either), Jeff Immelt (GE), and Virginia Rometty (IBM). Google's (GOOG) founders and Mark Zuckerberg (FB) stopped going a couple of years ago.
Jan. 17, 2014, 2:57 PM
- As U.S. investigators arrive in London to work alongside U.K. counterparts, Citigroup (C -0.3%) and HSBC today both suspended foreign exchange traders, reports Reuters.
- One Citi trader is based in NYC, the other in London, and both are G10 spot currency traders. A bank spokesman says they've been sent on "leave." Reuters' source at Citi says they were suspended after an investigation into chat room communications.
- The two HSBC traders are based in London, and one of them - at least in the past - was head of the bank's G10 spot FX desk.
- The four are the latest in a line of suspensions and now firings as Citi one week ago let go its head of European spot FX trading.
Jan. 13, 2014, 5:09 AM
- The Basel Committee for Banking Supervision has eased the way banks will have to report leverage ratios, or the amount of capital they hold against their loans and other assets.
- The regulations will not force banks to count 100% of their off-balance-sheet assets, such as much of their exposure to derivatives, and guarantees and letters of credit.
- That alterations will lower the need for banks to sell assets or raise capital to meet the Basel leverage-ratio requirements, which might be set at 3% or higher from 2018.
- The Stoxx Europe 600 Banks index is +1.5%.
- Major banks: RBS, HSBC, BCS, DB, CS, UBS, GS, JPM, C, MS, WFC, USB, BK, SAN, BBVA, LYG, NMR
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, EUFN, IPF, SEF, IAT, IYG, PFI, FXO, IXG, KBWB, KME, RKH, QABA, KRU, FINU, RWW, KBWR, RYF, FNCL, PSCF, AXFN, KRS, FINZ, EMFN, KBWX
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