HSBA.L - HSBC Holdings plc
| Previous Close | 598.30 |
| Open | 596.00 |
| Bid | 591.60 x 0 |
| Ask | 591.70 x 0 |
| Day's Range | 590.20 - 600.00 |
| 52 Week Range | 6.30 - 695.90 |
| Volume | 29,551,930 |
| Avg. Volume | 28,282,400 |
| Market Cap | 120.416B |
| Beta (3Y Monthly) | 0.78 |
| PE Ratio (TTM) | 8.59 |
| EPS (TTM) | 69.10 |
| Earnings Date | Oct 28, 2019 |
| Forward Dividend & Yield | 0.33 (5.54%) |
| Ex-Dividend Date | 2019-08-15 |
| 1y Target Est | 9.20 |
- Motley Fool
Are Virtual Banks a Threat to Hong Kong’s Big Banks and Their Shareholders?
Virtual banks are looking to disrupt Hong Kong's banking sector. But how much of a threat are they to the traditional banks and their businesses?
- Motley Fool
Are HSBC Holdings Shares Cheap Right Now?
HSBC's shares have fallen over 10% since late July. But does this Asian banking giant still have long-term potential?
- Financial Times
Correction: HSBC
HSBC’s share price is close to 600p, not 800p as wrongly shown in a chart accompanying an article on August 20 that showed an incorrect axis. Copyright © 2015 The Financial Times Limited. Please don't ...
- Bloomberg
Indonesia Surprises With Second Rate Cut to Support Growth
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Indonesia unexpectedly cut interest rates for a second straight month to spur an economy facing increasing risks from a global slowdown and intensifying trade war.Bank Indonesia lowered its seven-day reverse repurchase rate by 25 basis points to 5.5% on Thursday, a move predicted by only 13 of the 34 economists surveyed by Bloomberg. The majority expected the bank to keep policy unchanged after it lowered rates for the first time in almost two years in July.Governor Perry Warjiyo said the rate cut was consistent with the bank’s low inflation forecast and serves as a “preemptive measure to push economic growth momentum in the future.” The move also retains the attractive yield on domestic assets, he said.Indonesia is using a mix of monetary and fiscal policy to stimulate Southeast Asia’s biggest economy after growth slowed to a two-year low in the second quarter. Low inflation and the Federal Reserve’s dovish policy outlook is giving Bank Indonesia room to reverse some of last year’s rate hikes.“Indonesia is lucky with its continuing economic growth momentum, but we must take anticipative, preemptive steps in facing the risks of a slowing global economy,” Warjiyo said.Central banks in emerging markets like India, Brazil and Russia -- and, closer to home, Thailand, Malaysia and the Philippines -- have all cut rates this year to reignite growth.The Jakarta Composite Index rebounded immediately after the rate cut, but was down 0.2% at its close. The rupiah gained 0.1% against the dollar, while the yield on the 10-year benchmark rupiah bonds was down 4 basis points.Warjiyo said the central bank will “continue its accommodative policy mix.” It sees growth for this year below the government’s projection of 5.2%, while inflation -- which reached 3.32% in July --will probably come in below the midpoint of the 2.5% to 4.5% target band.“It seems that growth worries have taken on a greater urgency,” said Eugene Leow, a fixed income strategist at DBS Group Holdings Ltd. “And with many central banks across the world easing, BI probably felt comfortable enough to follow suit.”Indonesia’s rate cut complements President Joko Widodo’s plans -- outlined in his budget last week -- to boost growth to 5.3% next year through record spending of $178 billion and tax incentives to businesses. The economy grew 5.05% in the second quarter, a far cry from the 7% growth the president targeted in his first term.What Bloomberg’s Economists SayBank Indonesia shifted its policy stance to one that pre-emptively supports growth. This suggests a willingness to cut rates more aggressively, in our view. Ability to follow through, though, is likely to hinge on risk appetite which affects the currency and capital flow.Click here to read the full report.\-- Tamara Mast Henderson, Asean economistMost economists predicted the central bank would keep rates on hold this month given heightened market turmoil and a widening in the current account deficit to 3% of gross domestic product. The rupiah has slumped about 2% against the dollar in the past month, though it’s still among a handful of gainers in Asia this year.Economists see more rate cuts in coming months, but probably at a gradual pace. HSBC Holdings Plc sees a pause in September and another reduction in the fourth quarter.“The central bank has clearly become more concerned about growth risks in recent weeks, and relatively less concerned about financial stability risks due to an improvement in capital flows,” said Joseph Incalcaterra, an Asean economist at HSBC in Hong Kong. “That said, this will still be a gradual easing cycle by historical standards due to a relatively high current account deficit.”(Updates with comments from economists)\--With assistance from Chester Yung, Harry Suhartono, Clarissa Batino, Rieka Rahadiana and Michelle Jamrisko.To contact the reporters on this story: Viriya Singgih in Jakarta at vsinggih@bloomberg.net;Tassia Sipahutar in Jakarta at ssipahutar@bloomberg.netTo contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, ;Thomas Kutty Abraham at tabraham4@bloomberg.net, Michael S. ArnoldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
HSBC urges peaceful resolution to Hong Kong protests
HSBC and Standard Chartered have broken their silence on the anti-government protests that have rocked Hong Kong in recent months, calling for a peaceful resolution to the crisis in full-page advertisements published in local newspapers on Thursday. HSBC — which takes its name from Hong Kong and Shanghai, where it was founded 154 years ago — has sought to appear neutral as the protests have intensified. Beijing has also ratcheted up the pressure on international businesses that operate in Hong Kong and mainland China to take a pro-government stance and fire employees that have shown support for the protests.
- Bloomberg
HSBC's Biggest Bid in Years Could Get Even Bigger
(Bloomberg Opinion) -- Since getting burned in the financial crisis, HSBC Holdings Plc has been in sell rather than buy mode. But now that it’s out shopping, the bank is looking to splurge. HSBC is eyeing the Asian assets of struggling British insurer Aviva Plc, which could be worth between $3 billion and $4 billion, Bloomberg reporters Dinesh Nair, Manuel Baigorri and Stefania Spezzati wrote Thursday. That would make it one of the bank’s largest purchases since it bought subprime lender Household International for $15.5 billion in 2003.The London-based lender should be prepared to pay even more: Aviva is sure to have many suitors. While the company had a difficult run in Asia, a buyer with more regional presence could better navigate the regulatory hurdles of a fractured market. The bulk of Aviva’s Asian assets are in Singapore, where a large pool of affluent residents has helped gross written premiums rise 13% per year industry-wide, according to Bain & Co. Aviva has 885,000 customers in the Southeast Asian country and was the sixth-largest insurer in Singapore last year – ahead of HSBC. The company accounted for 4.2% of the city-state’s insurance assets in 2018, says Bloomberg Intelligence analyst Steven Lam.A rare, large asset like Aviva is bound to pique the interest of FWD Group Ltd., which Hong Kong billionaire Richard Li built from the ashes of Dutch insurer ING Groep NV’s Asian businesses. FWD, widely believed to be preparing for an initial public offering, has been busy buying assets: Late last year, it snapped up an 80% stake in Commonwealth Bank of Australia’s Indonesian life insurance arm for A$426 million ($302 million). The Japanese, meanwhile, have been avid acquirers of Southeast Asian insurance assets for years, as low growth and negative bond yields at home crimp the savings of its aging population. Just this week, Japan's Taiyo Life Insurance Co. said it will buy 35% of Myanmar's Capital Life Insurance Ltd. Tokio Marine Holdings Inc. bought the Thai and Indonesian businesses of Sydney-based Insurance Australia Group Ltd. for about A$525 million ($355 million) last year, and has been open about its Southeast Asian ambitions.It makes sense that HSBC is eager to jump in: Its chairman, Mark Tucker, is an insurance supremo, having run AIA Group Ltd. and Prudential Plc previously. The recent protests in Hong Kong are pressuring the bank, which gets more than half of its pretax profit from the former British colony, to diversify, as other firms with big bases in the city have done. On Thursday, HSBC broke its silence and called for a peaceful resolution to the tensions in a newspaper ad.With the midpoint of the $3 billion to $4 billion price range amounting to 22 times Aviva's 2018 adjusted operating profit, these jewels aren’t coming cheap. That’s the same level at which AIA, Asia’s biggest insurer, trades. Bidders should prepare for a price war.To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
HSBC Weighs Bid for Aviva’s Asian Assets in Diversity Push
(Bloomberg) -- HSBC Holdings Plc, the bank that shook up its senior leadership this month, is considering a bid for Asian operations being sold by Aviva Plc as it seeks ways to diversify its business in the region, people with knowledge of the matter said.London-based HSBC is in the early stages of weighing an offer for at least part of Aviva’s Asian business, the people said, asking not to be identified because the information is private. A deal would help HSBC bolster its insurance presence in Singapore and other parts of Southeast Asia, the people said.Aviva, the U.K. insurance conglomerate whose shares have dropped 27% in the last 12 months, confirmed in August it’s examining options for its Asian business as new Chief Executive Officer Maurice Tulloch’s turnaround takes shape. The company’s operations in the region could be valued at about $3 billion to $4 billion, with an official process slated to kick off later this year, Bloomberg News reported earlier.Other suitors are also considering bids for the Aviva assets, the people said. No final decisions have been made, and there’s no certainty the deliberations will result in a transaction, the people said. Representatives for HSBC and Aviva declined to comment.Shares of HSBC fell 0.6% as of 2:01 p.m. in Hong Kong on Thursday, while they rose 0.2% to 598.30 pence in London on Wednesday. Aviva’s American depositary receipts rose 2.1% in New York over-the-counter trading. The company’s London-listed shares rose 0.1% to close at 358.50 pence.Earlier in August, HSBC abruptly ousted Chief Executive Officer John Flint after just 18 months. Chairman Mark Tucker was increasingly at odds with Flint over the CEO’s focus on expansion in China, people with knowledge of the matter said at the time. The head of HSBC’s China business resigned the same week, and the bank unveiled a new round of job cuts that could eliminate 4,000 roles.Hong Kong, where HSBC generates more than half of its pretax profit, has for weeks been roiled in protests that have left the business and financial elite increasingly concerned about the city’s growth prospects. The bank’s presence in the rival Asian hub of Singapore is smaller than some international competitors such as Standard Chartered Plc.Aviva has been capitalizing on the surging ranks of middle class consumers in Asia, many of whom are newcomers to life insurance policies. Singapore is the company’s largest market in Asia, with its life insurance unit there generating 1.3 billion pounds ($1.6 billion) in new business and 141 million pounds in adjusted operating profit last year, according to its latest annual report.What Bloomberg Intelligence Says“Aviva’s Singapore business will be front and center as it mulls its Asian segments, including the option to sell them. The insurer may be inclined to sell its Asia units as a package, as smaller units may have less M&A appeal without the dominant Singapore segment. For suitors, there should be strong consolidation interest in Singapore. Regional peers such as Singapore-based FWD and Japanese insurers might also consider Aviva’s units in China, India, Indonesia and Vietnam.”\-- Steven Lam, insurance analyst\--Click here for the research(Updates to add Bloomberg Intelliegence report.)\--With assistance from Will Hadfield, Dominic Lau, Manuel Baigorri and Stefania Spezzati.To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Ambereen Choudhury in London at achoudhury@bloomberg.net;Jan-Henrik Förster in Zurich at jforster20@bloomberg.netTo contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, ;Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Ben Scent, Amy ThomsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Huawei Used Code Names for Syria, Sudan Activities, U.S. Alleges
(Bloomberg) -- Huawei Technologies Co. used code names and secret subsidiaries to conduct business in Syria, Sudan and Iran, the U.S. alleged in the extradition case related to sanctions violations against the company’s chief financial officer.The Chinese networking giant allegedly operated a de facto unit called DirectPoint in Sudan and Canicula in Syria, according to documents released this week by a Canadian court. In internal spreadsheets, Huawei also used the code “A5” to refer to Sudan and “A7” to Syria, the U.S. said in the documents submitted to the Canadian government in support of its request for the extradition of company CFO Meng Wanzhou.Huawei operated those units just as it controlled a subsidiary in Iran that obtained American goods, technologies and services in violation of U.S. sanctions, according to the allegations.The U.S. is seeking to extradite Meng -- daughter of Huawei’s billionaire founder Ren Zhengfei -- after accusing her and others at the company of conspiring to trick banks into conducting more than $100 million worth of transactions that may have violated U.S. sanctions. The company has denied it committed any violations. It didn’t respond Wednesday to requests for comment on the allegations in the court documents.“The motivation for these misrepresentations stemmed from Huawei’s need to move money out of countries that are subject to U.S. or EU sanctions -- such as Iran, Syria, or Sudan -- through the international banking system,” the Justice Department said in its request for Canada to arrest Meng as she arrived at Vancouver’s airport last December.The court on Tuesday released hundreds of pages of documents and video footage submitted by Meng’s defense to back its arguments that Canadian authorities deceived her about the true nature of her detention in order to collect evidence for the U.S. FBI.In those documents, the U.S. outlined its case against Meng and its plans for witnesses in the case against her if she is successfully extradited. Among those witness are unnamed executives from HSBC Holdings Plc, Standard Chartered Plc, BNP Paribas SA and Citigroup Inc. that allegedly were misled by Meng and her colleagues into continuing business with Huawei at the time despite the risk of sanctions violations.To contact the reporter on this story: Natalie Obiko Pearson in Vancouver at npearson7@bloomberg.netTo contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Andrew Pollack, Peter BlumbergFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
UPDATE 1-Citigroup, BNP caught up in U.S. case against Huawei CFO - documents
U.S.-based Citigroup Inc and French bank BNP Paribas are caught up in the U.S. criminal case against the chief financial officer of China's Huawei Technologies, according to newly available documents. The banks were named in documents released on Tuesday after a hearing in British Columbia Supreme Court, where Huawei CFO Meng Wanzhou is fighting extradition to the United States on bank fraud charges. The two are among at least four financial institutions that had banking relationships with Huawei when Meng and others allegedly misled them about its business dealings in Iran despite U.S. sanctions.
- Financial Times
FirstFT: Today’s top stories
for a role in Saudi Aramco’s planned stock market listing after a charm offensive by top executives, including former Trump administration official Dina Powell. The Wall Street bank had failed to secure a top advisory role in 2017 when Saudi Aramco nominated banks including JPMorgan Chase, Morgan Stanley, Moelis, Evercore and HSBC for what could be the world’s largest listing. The successful launch of a $12bn international bond by Saudi Aramco this year renewed momentum for the IPO and revived optimism about the Saudi economy after the international condemnation that followed the killing of journalist Jamal Khashoggi.
- Financial Times
FirstFT: Today’s top stories
FT subscribers can click here to receive FirstFT every day by email. Investors are anticipating a fresh wave of stimulus measures to tackle flagging growth as the White House considers a new round of ...
- Bloomberg
HSBC Gets the Cold Shoulder in China
(Bloomberg Opinion) -- It’s hard not to see HSBC Holdings Plc’s exclusion from China’s interest-rate reform as a snub.Hong Kong’s biggest bank wasn’t included in a list of 18 lenders that will participate in pricing for a new loan prime rate that the People’s Bank of China will start releasing Tuesday. The roster includes foreign lenders Standard Chartered Plc and Citigroup Inc., which have smaller China businesses than HSBC.It’s the latest sign that all may not be well in HSBC’s relations with Beijing, after a turbulent period that has seen the departures this month of Chief Executive Officer John Flint and the bank’s Greater China head, Helen Wong. HSBC shares fell 13% in Hong Kong this year through last Friday, compared with a decline of less than 1% in the benchmark Hang Seng Index.London-based HSBC, which is also Europe’s biggest bank, has made China a key plank of its growth strategy. The lender is the third-largest corporate bank in the country by market penetration, according to data provider Greenwich Associates LLC. That places it ahead even of China Construction Bank Corp. and Agricultural Bank of China Ltd., two of the nation’s big four state-owned lenders. Standard Chartered and Citigroup don’t rank among the top five, according Gaurav Arora, head of Asia Pacific at Greenwich.It could be argued that HSBC’s focus on big corporate clients means it’s less attuned to the loan market for small and medium-size enterprises that are the focus of China’s changes to its interest-rate regime. That would be a stretch, though. Corporate banking is a scale game. And even though StanChart may have a greater preponderance of smaller clients, HSBC surely has many similar customers. Citigroup’s inclusion makes more sense: It’s the only U.S. bank in China with a consumer-lending business that spans credit cards to SME loans. The list also includes less influential domestic lenders such as Bank of Xian Co. Those searching for reasons why HSBC may have fallen into China’s bad books may point to Huawei Technologies Co. Liu Xiaoming, China’s ambassador to the U.K., summoned Flint to the embassy earlier this year to interrogate him over the bank’s role in the arrest and prosecution of Meng Wanzhou, the chief financial officer of Huawei, the Financial Times reported Monday. The then-CEO told him HSBC had no option but to turn over information that helped U.S. prosecutors build a case against Meng, the FT said. On Aug. 9, an HSBC spokeswoman denied that Wong’s departure as Greater China head was linked to any issue involving Huawei, pointing out that she announced her resignation before Flint’s departure. Still, the bank has faced criticism in China’s state-owned media over its role in the case. The way HSBC helped the U.S. Department of Justice acquire documents concerning Huawei was unethical, the Global Times reported previously, citing a source close to the matter. The bank was likely to be included in China’s first “unreliable entity” list of companies that have jeopardized the interests of Chinese firms, it said.The timing of China’s interest-rate snub won’t do anything to quell jitters, coming a day after Cathay Pacific Airways Ltd. CEO Rupert Hogg resigned amid criticism from Chinese regulators over its stance on employee participation in Hong Kong’s protests. Beijing is becoming more muscular in its attitude to the city’s unrest and foreign-owned businesses aren’t being spared. In an increasingly politicized environment, even a business that’s been around for 154 years will have to tread carefully. To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Financial Times
HSBC: Chinese headwinds threaten to blow bank off course
When Liu Xiaoming, China’s ambassador to the UK, gave an address at HSBC’s Chinese new year party in February, he was full of praise for the bank. Speaking in the walnut-panelled United Nations Ballroom ...
- Moody's
HSBC Bank Australia Ltd -- Moody's announces completion of a periodic review of ratings of HSBC Bank Australia Ltd
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of HSBC Bank Australia Ltd and other ratings that are associated with the same analytical unit. "IMPORTANT NOTICE: MOODY'S RATINGS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
- MarketWatch
British stocks stumble for second day on U.S.-China contagion fears
British stocks on Thursday crumbled on concerns over the global economy in the wake of the U.S.-China trade war, even as data showed its own consumers have been resilient.
- American City Business Journals
Under new local exec, HSBC aims for Boston’s global businesses
The bank's head of New England corporate banking, a newcomer to Boston, wants to make HSBC a bigger name in Boston executive suites and boardrooms.
- South China Morning Post
HSBC reshuffles decks as the bank braces for a more challenging operating environment
John Flint, then-HSBC chief executive, declared in June of last year that it was time for the bank "to get back into growth mode".Under his predecessor Stuart Gulliver, the lender, once known in its advertising as the "world's local bank", had cut thousands of jobs, shrunk its global footprint from 87 countries to 67 and spent tens of millions of dollars to revamp its compliance following a scandal over its money-laundering controls that saw it pay US$1.9 billion in a settlement with US authorities.The outlook was generally positive at the time: central banks, including the Federal Reserve, had begun tightening after a decade of historically low interest rates. And Flint was betting HSBC could further expand its business in fast-growing Asian markets which account for about half of its revenue. HSBC's CEO makes surprise departure as bank seeks new growthFlint's unexpected exit shows the lower tolerance that HSBC's directors have for underperformance, particularly as the lender faces more challenging market conditions, according to analysts. The bank missed a key target for expense growth last year and a more positive first half opened the door for a smooth exit.Mark Tucker, the HSBC chairman, said last week the decision to replace Flint was about the bank's future and cited the "pace, ambition and decisiveness" of interim CEO Noel Quinn as "absolutely essential to capitalise on the opportunities ahead".The abrupt departure of Flint was a "surprise" to many in the company, executives say, but comes as the bank faces a much more difficult operating environment than it did when Flint, a career HSBC executive, took over as CEO in February 2018.The year-long US-China trade war cut into business sentiment globally as some companies were delaying future investments, sending some investors to the sidelines as recession fears grow. Sogo operator worried over outlook as protests, trade war hit salesHong Kong " HSBC's biggest market " has been hit by two months of protests, which is starting to hurt the economy, even though the bank said the effect on its business has been "limited" so far.Plus, central banks are becoming dovish as the outlook for the global economy has weakened, which could put pressure on the bottom lines of HSBC and other banks, analysts said."Global uncertainty has changed sentiment and further [interest rate] rises are unlikely, and we may see some of the improved net interest margin reverse in 2019," Paul McSheaffrey, head of banking and capital markets at KPMG China, said in a recent report.Another nail in the coffin for Flint may have been HSBC's share price."Whilst the abrupt CEO's exit without the appointment of a successor shows weaknesses in corporate governance, it also signals the board's intention to more aggressively target underperforming businesses and cost structure, which " if appropriately executed " would improve efficiency and profitability of the group," Alessandro Roccati, a Moody's Investor Services senior vice-president, said.S&P; Global Ratings said the ousting of Flint shows an "increased ruthlessness" on the part of HSBC's directors when it comes to middling performance.HSBC executives said that the abrupt departure of John Flint was a "surprise" to many in the company. Photo: Reuters alt=HSBC executives said that the abrupt departure of John Flint was a "surprise" to many in the company. Photo: ReutersHSBC expects to take six to 12 months to find a replacement and look at candidates both inside and outside the bank."I think we're looking again for somebody with ability to deal with scale, ability to deal with multiple geographies, ability to understand Asia, ability to understand banking, again, both tactically and strategically focused, someone who will continue to move with pace and think about the simplification, and somebody who has a great ambition for the group," said Tucker. HSBC's Greater China head Helen Wong quitsThe bank has been quietly reassuring officials in Beijing that it had an obligation under financial regulations in the US and a court-ordered monitorship at the time to comply with requests for information by authorities about its dealings with Huawei, according to people familiar with the effort.HSBC has declined to comment, saying it is not a party to the criminal case against Meng.HSBC has had to reassure Beijing over its involvement in the US investigation of Huawei Technologies, after its CFO Meng Wanzhou was arrested in Canada. Photo: Reuters alt=HSBC has had to reassure Beijing over its involvement in the US investigation of Huawei Technologies, after its CFO Meng Wanzhou was arrested in Canada. Photo: ReutersLast month, HSBC also was ordered by the Malaysian government to transfer more than 1 billion ringgit (US$238.5 million) from an account held by the state-owned China Petroleum Pipeline Engineering in a dispute over a pipeline project that was suspended last year. HSBC has declined to comment.There have been calls by some netizens in China to add HSBC to the unreliable list since word of the bank's cooperation in the Huawei case and the Malaysian seizure became public. On July 15, the day after the funds seizure in Malaysia, a blog operated by China's state-owned Beijing Daily newspaper started publishing calls to put HSBC on the unreliable list.The Chinese Ministry of Commerce, responsible for the list, has said it is still in the process of preparation and declined to comment on specifics.Staying on Beijing's good side is critical as mainland China becomes a larger component of the bank's business, particularly as the country's financial services industry opens further.In the past four years, HSBC has opened the first majority-owned joint venture securities company in China, debuted a sole-branded credit card and doubled the size of its workforce. In July, the bank said that it was creating a US$880 million technology fund to provide financing to early stage companies in the Greater Bay Area.Tucker, the HSBC chairman, said that the company remains committed to its strategy, which is heavily reliant on growth in mainland China and Hong Kong.Operating income, which is similar to revenue in the US, rose 5.9 per cent to US$7.54 billion in the bank's Asia business in the second quarter. HSBC to cut 2 per cent of its workforce as bank looks to reduce costsDespite the positive quarter, HSBC said last week that it would cut less than two per cent of its workforce. That was less dramatic than the 18,000 job cuts announced at Deutsche Bank in July, but represented an admission that the bank, which employs nearly 238,000 people worldwide, needed to reduce the pace of its expense growth to achieve its target for returns in 2020."We could see the revenue outlook softening. We knew to get to 11 per cent [return on tangible equity] we had to get there a different way," Ewen Stevenson, the HSBC CFO, said.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
- Bloomberg
Some British Firms Are Fine About No-Deal Brexit
(Bloomberg Opinion) -- Is your company immune to Brexit? With the looming threat of the U.K. leaving the EU without a withdrawal deal and a slim but rising risk of the pound plunging to parity with the dollar, more chief executives are telling investors they can handle any eventuality – however messy.Unfortunately, having a fully fleshed out Brexit contingency plan is a luxury not all firms can afford. Nor does it solve the question of how any company will cope if a no-deal departure crashes the economy.A hunt through Bloomberg’s trove of filings of company financial results throws up six publicly-traded companies that have labeled themselves “Brexit-proof,” or close to it. These are: healthcare facilities provider Primary Health Properties Plc; wealth manager Rathbone Brothers Plc; food producer Cranswick Plc; industrial real estate firm Stenprop Ltd.; Lloyd’s of London and the payments technology provider Net 1 UEPS Technologies Inc.Their confidence stems either from the niche products that they sell, their domestic U.K. supply chains (meaning less exposure to a sudden rise in tariff barriers to trade), or the fact that they’ll keep EU-based hubs that remove the uncertainty of regulatory hurdles.They’re not alone in their messages of comfort. Much of the finance world has had to prepare for the worst, including the likes of Barclays Plc, HSBC Holdings Plc and Royal Bank of Scotland Group Plc. Other industries are joining the fray. “Leaving the EU without a deal is not corporate death for us, but it’s annoying,” the boss of the Volskwagen AG-owned luxury carmaker Bentley said this week. A no-deal scenario means only “mild disruption” for the retailer Next Plc, according to its CEO Simon Wolfson. Is this complacency or just sound planning?There are three big Brexit risks cited frequently by companies: Tariff barriers, non-tariff or regulatory hurdles, and logistical issues such as holdups at ports.On tariffs, the Confederation of British Industry lobby group has offered up some dire warnings, including textile imports from Turkey facing an average charge of 12% post-Brexit and vehicle exports to the EU getting whacked with a 10% levy. But some firms think they can take the pain. Next estimates 20 million pounds ($24 million) in additional input costs from import duties, equivalent to a 0.5% price increase on its clothing products. Chemicals producer Croda International Plc estimates a “mid-to-high single-digit million” impact from tariffs, a cost it would partly absorb and partly pass on to customers. Makers of higher end stuff, such as $200,000 Bentleys, will be confident of getting shoppers to fork out more if their costs go up.On the threat of more regulation and other non-tariff changes, some CEOs are equally sanguine. Croda’s management says it’s ready to re-register its products in the EU in the event of a no-deal departure. Next says there’s no reason why independent testing of its products would stop them being acceptable to Brussels regulators.On the fear about logistical snarl-ups in the immediate aftermath of a sudden U.K.-EU rupture, the more optimistic British bosses point to their stockpiling of goods and securing of alternative supply routes. Several say they’ve amassed six months’ worth of supply usually delivered from Europe. Bentley and Next say they can avoid the crowded Dover-Calais shipping route if it’s disrupted. “I’m much less frightened of no-deal,” says Wolfson.It’s important to remember, however, that all of this preparation costs money (and that Wolfson is a Conservative Party peer and leave voter). A look at Next’s 11-page Brexit contingency plan published last year shows an elaborate new structure to limit the pain. It has set up a German company through which it intends to shift more European sales and an Irish entity to handle orders there.Yet allocating millions to emergency plans means delaying investment or passing on the cost to suppliers or clients. Some companies can swallow this more easily than others. For Westley Group, a small foundry and engineering group, a loss of 2 million pounds in EU orders related to Brexit last year equated to 7% of its revenue. That’s significant.And managing to survive the worst ravages of a hard break with Europe won’t mean much if the U.K. economy is worse off. Investors are certainly betting that way by favoring the big, internationally diversified companies of the FTSE 100 over those that make most of their sales in Britain.The chart above shows a 13% performance gap over the past year between the shares of British exporters (which get most of their revenue overseas) and those of domestically-focused U.K. companies. It’s interesting that the latter group include companies that claim to be fully prepared such as Barclays.One thing CEOs can't control is investors’ own emergency plans.\--With assistance from Mark Gilbert .To contact the author of this story: Lionel Laurent at llaurent2@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Financial Times
Bank needs an outsider to overhaul its operations
It is inexcusable that the chair of HSBC (albeit with a fraction of the time), the outgoing CEO, the board and last but not least major influential institutional investors failed to pick the correct candidate. It is surprisingly unlike HSBC to act with such speed and therefore one presumes with a sense of urgency. Institutions do not wish to see another penny “invested” in the investment bank.
- Bloomberg
This Alpine Lighting Deal Brings an Avalanche of Risk
(Bloomberg Opinion) -- A 12,000-foot-high Alpine mountain range and 250 miles separate AMS AG’s base in the Austrian town of Premstaetten and Osram Licht AG’s Munich headquarters. The Austrian firm must overcome much bigger obstacles in its attempted takeover of the German lighting-maker. After months of toing and froing, AMS finally tabled a 3.7 billion-euro ($4.1 billion) approach for Osram late on Sunday. The deal would trump a 3.4 billion-euro bid from Bain Capital and Carlyle Group LP that Osram has already accepted. From that perspective, it looks very attractive to the German company’s investors. The approach offers a glimmer of hope: the Bain-Carlyle bid appears dead in the water after being rejected by Allianz Global Investors, Osram’s biggest shareholder, last week.The difficulty is on the AMS side. Chief Executive Officer Alexander Everke hasn’t yet done enough to warrant lifting the company’s debt ratios to levels well above most peers in exchange for returns in the near term that are likely to be below capital costs, based on planned synergies and analyst earnings forecasts. The company is confident returns will exceed costs in the second year after the deal completes. That will be contingent on hitting some ambitious savings targets. In Everke’s three years at the helm, AMS has generated significantly lower returns for shareholders than the Philadelphia Stock Exchange Semiconductor Index, despite major outlays on acquisitions and manufacturing capacity. Sure, AMS has improved its sensor offering and, after a bumpy few years, might finally be starting to demonstrate returns on that spending.But integrating Osram, with its 24,300 employees globally, is a significantly greater challenge than AMS’s biggest acquisition to date: The 2016 deal to buy Heptagon, with just 830 employees, for $570 million.To fund the takeover, AMS plans a 1.5 billion-euro equity increase, underwritten by UBS Group AG and HSBC Holdings Plc, which 50% of shareholders will need to approve at an extraordinary general meeting in the fourth quarter. In return, it will get a company whose core automotive market is shrinking.The offer is a gamble on carmakers adopting more and smarter sensor technology for the vehicles they are still able to sell. Osram’s strongest business has traditionally been car headlamps, but in recent years it has expanded into different parts of the optical spectrum, such as infra-red. AMS is optimistic that it can package those products with its sensors to work in autonomous cars (which might need laser-based environmental sensors) and for in-cabin sensing (to tell, for example, if the driver has fallen asleep).It seems a hell of a lot of upfront risk given that it’s unclear what kind of sensors autonomous cars will need when they hit the roads on a significant scale in perhaps a decade’s time. AMS was unwise to invest so heavily in smartphone sensors when it did. But the automotive sensor market is not the best way to diversify.\--With assistance from Chris Hughes.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Stephanie Baker at stebaker@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Business Wire
HSBC Bank’s Personal Lending Platform Goes Live
The new digital lending platform, powered by the leading end-to-end technology platform Amount, provides U.S. consumers with a simple way to apply for personal loans online
- Financial Times
UK’s 15 biggest mortgage lenders hit by price war
The root cause of much of the pressure in the mortgage market is legislation that came into force at the start of the year that aims to reduce risk. The requirement that large banks separate — ringfence — their domestic retail banking operations from international and investment banking has left banks such as Barclays, and particularly HSBC, with huge excesses of customer deposits that can only be put to use in the UK retail market, including the mortgage business.
- Financial Times
Investment bank job cuts near 30,000 as outlook sours
Global investment banks are shedding tens of thousands of jobs as falling interest rates, weak trading volumes and the march of automation create a brutal summer for the sector. Almost 30,000 lay-offs have been announced since April at banks including HSBC, Barclays, Société Générale, Citigroup and Deutsche Bank. Most of the cuts have come in Europe, with Deutsche accounting for more than half the total, while trading desks have been hit hardest.
- Reuters
HSBC Greater China chief Wong leaves for external role
HSBC Holdings' Greater China Chief Executive Helen Wong is leaving, a bank spokeswoman said on Friday, the second senior departure this week after the ousting of group CEO John Flint. Wong has decided to leave to pursue an external opportunity, the spokeswoman said, adding that her role will be dropped and the Greater China region, which includes Hong Kong and Taiwan, would be run by the respective country heads. Greater China is HSBC's biggest profit driver, but the banking sector outlook in the region has been clouded by the tit-for-tat tariff war between China and the United States, as well as unrest in Hong Kong.
