About a year and a half ago I warned that HSBC would be facing increasing and unanticipated (I was a contrarian on the China bubble) losses/slowdowns in Asia, as well as increasing losses on bad debt in the US. I believe I was one of the very few who threw this caution out there. I have included a free opinion along with the macro analysis to back it up here (free registration required): Part one of three of my opinion of HSBC and the macro factors affecting it. Subscribers can download the forensic reports: HSBC_Holdings_Report_04August2008 - retail 2008-09-16 06:38:38 87.28 Kb and HSBC_Holdings_Report_04August2008 - pro 2008-11-06 10:11:09 138.89 Kb. As a refresher, the 2nd quarter 2008 review is available here: HSBC 1H 08 results update. There is a discernable trend.
March 1 (Bloomberg) -- HSBC Holdings Plc, Europe’s biggest bank, posted full-year net income that missed analyst estimates after impairments for bad loans rose and profit in Asia fell.
Earnings increased to $5.83 billion from $5.73 billion a year earlier, the London-based lender said today in a statement. That was less than the $7.76 billion median estimate of 12 analysts surveyed by Bloomberg. The bank dropped in London trading.
Loan impairment charges and other credit risk provisions rose to $26.5 billion in 2009 compared with $24.9 billion the previous year, the company said. Pretax profit in Hong Kong declined to $5.03 billion from $5.46 billion, and fell 11 percent in the rest of Asia-Pacific to $4.2 billion....
The bank plans to trade its shares in Shanghai and moved Chief Executive Officer Michael Geoghegan to Hong Kong from London last month to sharpen its focus on Asia. HSBC halted consumer finance loans in the U.S. after racking up provisions of at least $70 billion in the past four years following its acquisition of U.S. subprime lender Household International Inc.
“There were a lot of people who were pushing the stock up as a top stock for this year,” said Simon Maughan, London-based analyst at MF Global Securities Ltd., who has a “neutral” recommendation on the bank. “The environment isn’t there to develop these earnings.”
... Pretax profit at the investment banking unit more than tripled to $10.5 billion from $3 billion. It was the only one of HSBC’s divisions to report a gain in profit.
The bank’s North American unit posted a loss of $7.74 billion from a loss of $15.53 billion, the bank said.
Disclosure: no positions at this time