24.39 +0.58 (2.44%)
Pre-Market: 6:02AM EDT
|Bid||0.00 x 1200|
|Ask||0.00 x 3200|
|Day's Range||23.62 - 24.04|
|52 Week Range||22.96 - 42.17|
|Beta (5Y Monthly)||0.57|
|PE Ratio (TTM)||26.60|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Feb 27, 2020|
|1y Target Est||29.10|
A Canadian judge will rule Wednesday on a key aspect of Huawei Technologies Chief Financial Officer Meng Wanzhou's extradition to the United States, with a favourable judgment seen as paving the way for the release of the Chinese executive after 18 months of house arrest. British Columbia's Superior Court Associate Chief Justice Heather Holmes will rule on the double criminality issue of the extradition case, deciding whether Meng's alleged actions were a crime in Canada as well as the United States at the time of her arrest.
To cope with the economic fallout of the pandemic, the board of HSBC wants executives to deepen restructuring efforts, which may include further job cuts.
(Bloomberg) -- The chief financial officer of Huawei Technologies Co., fighting extradition to the U.S., gets her first shot at release this week in a case that’s triggered an unprecedented diplomatic tussle between the U.S., China and Canada.On Wednesday, the Supreme Court of British Columbia is set to release a decision on whether Meng Wanzhou’s case meets a key threshold of Canada’s extradition law. If Associate Chief Justice Heather Holmes rules that it fails to meet that test, Meng could be released from house arrest in Vancouver. If not, extradition proceedings will continue.The case was triggered when Meng was arrested on a U.S. handover request in December 2018 during a routine stopover at Vancouver airport, a city where she owns two homes and often spent summer holidays. The fallout has since spanned three countries.Meng, the eldest daughter of Huawei’s billionaire founder, Ren Zhengfei, has become the highest profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat.China has accused Canada of abetting “a political persecution” against a national champion. In the weeks after her arrest, China put two Canadians -- Michael Spavor and Michael Kovrig -- in jail, halted billions of dollars in Canadian imports and put two other Canadians on death row, plunging China-Canada relations into their darkest period in decades. U.S. President Donald Trump muddied the legal waters further when he indicated early on that he might try to intervene in her case to boost a China trade deal.Canadian Prime Minister Justin Trudeau -- caught between his country’s two biggest trading partners -- has resisted any such attempt to interfere in the high-stakes proceedings, saying the rule of law will govern Meng’s case.“Canada has an independent judicial system that functions without interference or override by politicians,” Trudeau said last week in response to comments by the Chinese ambassador that Meng’s case was the biggest thorn in Canada-China relations. “China doesn’t work quite the same way and doesn’t seem to understand that we do have an independent judiciary.”China’s foreign ministry urged Meng’s release at a regular briefing in Beijing Tuesday, saying the U.S. and Canada had “abused their bilateral agreement on extradition.”“Canada should correct its mistake and immediately release Meng Wanzhou and ensure her safe return to China to avoid continuous damage of China-Canada relations,” ministry spokesman Geng Shuang said. He said the rights of Kovrig and Spavor had been “guaranteed and protected.”Escalating FightMeng, 48, faces tough odds: of the 798 U.S. extradition requests received since 2008, Canada has refused or discharged only eight cases, or 1%, according to Canada’s Department of Justice.Whether she goes free or continues her battle against U.S. extradition, the ruling is likely to further escalate the fight between Washington and Beijing, increasingly at loggerheads over everything from the coronavirus pandemic to the status of Taiwan and Hong Kong to trade and investment.Huawei continues to play a central role in those tensions. Earlier this month, the Commerce Department barred chipmakers using American equipment from supplying Huawei without U.S. government approval, closing a loophole in an effort to cut the Chinese company off from essential supplies used in its phones and networking gear. The move drew condemnation from Beijing and warnings from Huawei’s rotating chairman, Guo Ping, that the latest U.S. curbs on its business would cause the whole industry to “pay a terrible price.”The U.S. government has lobbied its allies, including Canada, to ban Huawei from next-generation 5G networks, saying its equipment would make such infrastructure vulnerable to spying by the Chinese government. Despite that, the U.K. said in January it would allow Huawei a limited role. But in recent days, British media have reported the government is backtracking and preparing to end Huawei’s presence by 2023.Trudeau has been stalling on Canada’s decision with the fates of Spavor and Kovrig hanging in the balance. The two detainees have been confined for more than 500 days without access to lawyers. In contrast, Meng was photographed by CBC News on Saturday as she posed with nearly a dozen colleagues and friends -- social distancing rules to fight the virus notwithstanding -- displaying victory signs in front of the courthouse.The pursuit of Meng by U.S. authorities predates the Trump administration: officials were building a case against her since at least 2013, according to court documents in her case. Central to the case are allegations that Meng committed fraud by lying to HSBC Holdings Plc and tricking the bank into conducting Iran-related transactions in breach of U.S. sanctions.Wednesday’s ruling will focus on whether the case meets the so-called double criminality test: would Meng’s alleged crime have also been a crime in Canada?Her defense has argued that the U.S. case is, in reality, a sanctions-violations complaint framed as fraud in order to make it easier to extradite her. Had Meng’s alleged conduct taken place in Canada, the transactions by HSBC wouldn’t violate any Canadian sanctions, they say. The U.S. bank and wire fraud charges carry a maximum term of 20 years in prison on conviction.If the ruling goes against her, Meng’s next court hearings are scheduled for June and are set to continue to at least the end of the year. Appeals could lengthen the process for years longer.(Updates with China foreign ministry comment from eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
HSBC bankers don’t know whether they are coming or going. Chief executive Noel Quinn should harden his resolve and remember the dictum “never let a crisis go to waste”. Covid-19 is only adding to the problems HSBC faces.
One strategist says the economy is better prepared for a new wave of infections — and value stocks are near a point where they will lead the market.
The British government will unlock £150 million in cash from bank accounts that have been overlooked by their owners and repurpose it to support social enterprises and charities working through the coronavirus crisis. Speaking at the daily Downing Street conference on Wednesday, the culture secretary, Oliver Dowden, said he would accelerate the release of £71 million of new funds from dormant bank accounts alongside £79 million already freed up to help charities in dealing with the pandemic. Dormant accounts are defined as those untouched for 15 years.
When a payroll glitch left Natalie Gallagher so short of cash this month she couldn't afford her bus fare to work, she turned to her usual lender Amigo for an emergency top-up loan. Like many of the lenders that thousands of higher-risk borrowers in Britain depend on, Amigo had tightened its criteria for handing out cash in the wake of the coronavirus. "Amigo was my only real option."
Investments banks cut jobs at the fastest pace in six years during a first quarter in 2020 even though the coronavirus pandemic triggered a surge in volatility and boosted revenues to a five-year high, data published on Wednesday by research firm Coalition showed. While investment banks have benefited from the short-term increase in trading, they are expected to be hit hard by a global recession triggered by the COVID-19 crisis and have already imposed hiring freezes. Coalition's data showed that the banks' revenues from fixed income, currencies, and commodities had their strongest first quarter since 2015, surging 20% to 22.7 billion dollars, as the financial turmoil from the coronavirus crisis prompted a spike in trading.
HSBC Holdings PLC <HSBA.L> said on Monday its insurance unit had agreed to acquire its China life insurance venture partner's 50% stake to own fully the company under the new rules on foreign ownership that came into effect in January. The move will allow London-headquartered HSBC, which gets the bulk of its revenue from Asia, to further expand its footprint in the world's second-largest economy, where it has deployed billions of dollars as part its Asia "pivot" strategy. The transaction to buy the stake in HSBC Life Insurance Co Ltd (HSBC Life China) from joint venture partner the National Trust Ltd will be structured as a transfer of equity interest and is subject to regulatory approvals, the lender said.
HSBC <HSBA.L> has cut a number of top management roles in its investment bank, memos seen by Reuters showed, a sign that Chief Executive Noel Quinn is pressing on with plans to shake up the group despite having put a wider job cut programme on hold. CEO Quinn last month announced a temporary halt to plans for 35,000 redundancies across the bank because of the impact of the coronavirus pandemic. HSBC's twin homes of Britain and China have been particularly hard hit by the pandemic, while cuts to central bank interest rates worldwide will curb the bank's already pressured profits and it faces a shareholder revolt in Hong Kong over dividend halts.
British banks should use their substantial capital and liquidity buffers to support the economy hit by the coronavirus pandemic, the Bank of England said on Monday. The BoE's Prudential Regulation Authority (PRA) said it expects banks to focus on continuing to support customers. "Banks are expected to use their liquidity buffers in doing so, even if it means liquidity coverage ratios go significantly below 100%," the PRA said in guidance to lenders.
HSBC and Standard Chartered Bank would be welcomed by the government, if they were to move their headquarters to Hong Kong, a senior minister said, adding that the city met international lenders' regulatory and business requirements."HSBC has always had a lot of operations in Asia and Hong Kong, while a substantial portion of its profitability also comes from the region. Likewise, Standard Chartered Bank also has a big exposure to Hong Kong and Asia. The regulations and business opportunities in Hong Kong are very good. We would welcome it " if HSBC or Standard Chartered Bank decide to relocate here," James Lau Yee-cheong, the city's Secretary for Financial Services and the Treasury, said in a recent interview.Lau's comments come after the London-based lenders " also two of the city's three currency-issuing banks along with the Bank of China (Hong Kong) " said on Wednesday they would cancel dividend payments in the fourth quarter and in the first three quarters of 2020, at the behest of the United Kingdom's Prudential Regulation Authority, an arm of the Bank of England and their chief regulator. The cancellation is meant to allow them to reserve more funding for small and medium enterprises amid the Covid-19 pandemic.This is the first time since 1946 that HSBC has cancelled its dividends. Last week, both banks suffered their biggest sell-off in a decade, while investors and brokers called for HSBC to move its headquarters back to Hong Kong to avoid the UK's regulatory requirements."We took a considered decision on domicile in 2016, and so far do not have plans to change this. Hong Kong is one of our two home markets and continues to be a major contributor to the group. We have confidence in the resilience of Hong Kong as a financial centre, and we are committed to supporting its continued growth and development," an HBSC spokeswoman said on Sunday. Investors wipe billions off HSBC, StanChart's shares, call for HQs to moveThe non-payment of dividends is the third time in the past two decades that Hong Kong has readied the red carpet for HSBC. There was speculation in 2008 that it would move back to the city for tax reasons; in 2015 for the spin-off of its UK retail business; and in 2016 because of the Brexit vote.HSBC, which was founded in Hong Kong in 1865, moved its headquarters to London to fulfil a regulatory requirement to expand in the UK after it acquired Midland Bank in 1993.Hong Kong, the "H" in HSBC, is the bank's biggest single geographical market. HSBC earned 49 per cent of its adjusted revenue from Asia last year, and about a third of its shares are held by retail investors, who depend on its dividends for income.But, as a UK-domiciled bank, it felt it had to follow the BoE's call, as did several other UK banks, including Standard Chartered, Barclays, Royal Bank of Scotland and Lloyds Banking Group.Meanwhile, the Hong Kong Monetary Authority (HKMA), the city's de facto central bank, last week said it did not require local lenders to suspend dividend payments as the local banking sector was well capitalised."Hong Kong's financial markets will continue to benefit from the development of Greater Bay Area projects, which will bring in a lot of opportunities to international lenders," Lau said. "The current outbreak might lead to some slowdown, but it is not a financial crisis. The Hong Kong government has brought in many relief measures " and we will offer more " to help companies cope with the economic impact of the pandemic." HSBC to cut costs by US$4.5 billion, slash 35,000 jobs in third overhaul in a decadeHe pointed out that local banks' average capital adequacy ratio stood at 20.7 per cent at the end of last year, above the 8 per cent minimum requirement. He said Hong Kong lenders had already provided 9,000 small companies with HK$57 billion (US$7.3 billion) in loans under special relief programmes."HSBC should move its headquarters back to Hong Kong, so it can make the HKMA its primary regulator and does not need to scrap dividends. Local brokers and investors will continue to lobby the bank to relocate its base to Hong Kong and to reconsider its decision about dividend payments. It should at least consider paying the dividend in shares, so that it does not affect its cash flow," said Gordon Tsui, chairman of the Hong Kong Securities Association.Standard Chartered, which has always been based in the UK, could not be reached for comment.Sign up now and get a 10% discount (original price US$400) off the China AI Report 2020 by SCMP Research. Learn about the AI ambitions of Alibaba, Baidu & JD.com through our in-depth case studies, and explore new applications of AI across industries. The report also includes exclusive access to webinars to interact with C-level executives from leading China AI companies (via live Q&A; sessions). Offer valid until 31 May 2020.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 © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
Incensed by HSBC's decision to cancel its dividend at the request of regulators last week, a group of more than 3,000 investors in Hong Kong demanded on Monday that the lender reinstate its final payout for 2019 and instead eliminate compensation for top management for a year.From retirees to large pension funds, cutting the cash dividend has been particularly harsh for Hong Kong investors, who have come to rely on it as a steady source of income. About a third of the bank's shareholders in Hong Kong are retail investors and its shares are a common gift for graduates and newlyweds.Shareholders wiped about US$15 billion off the bank's market capitalisation over three days last week. The bank's shares, however, rose 2.8 per cent to close at HK$38.95 in Hong Kong on Monday."I bought HSBC shares because it always pays a high dividend," said a shareholder who only gave her surname as Wong at a media briefing on Monday. "I bought 10,000 shares on February 27 after it announced its fourth dividend. But on April 1, it said the payment is cancelled. How can a big bank lie to a small shareholder like me?"Wong, who cried during Monday's press conference, said she owns 20,000 HSBC shares, which would have entitled her to a cash payout of US$4,200 (HK$32,760) had the final interim dividend not been cancelled.HSBC and Standard Chartered, two of the three banks authorised to issue currency in the city, suspended their dividends and share buybacks on April 1 at the request of the Prudential Regulation Authority (PRA), an arm of the Bank of England and their chief regulator. The PRA threatened to use its statutory powers if the UK's biggest banks, including HSBC, did not comply.On Friday, Noel Quinn, the HSBC chief executive, wrote directly to shareholders to explain the decision and said that the bank regrets the loss for its Hong Kong investors.The group of rebel shareholders, calling itself the HSBC Shareholders Alliance on Facebook, is seeking to convince enough investors to band together to force the company to convene an extraordinary general meeting to consider their demands " they are aiming to attract support from at least 5 per cent of shareholders.The group claims to have already attracted more than 3,000 shareholders, ranging from small investors to family offices and pension funds, who own a combined 2 per cent of the lender's shares worth about HK$10 billion.They want HSBC to pay the final dividend in stock, rather than cash, and eliminate pay for the bank's top executives for a year, as well as add a director representing shareholders on its board. The group is studying ways to protect the rights of shareholders, including taking legal action.Lawmakers called on HSBC to reconsider the decision and pay a scrip dividend, which gives shareholders the option to receive stock instead of cash."This is a financial scam," said Christopher Cheung Wah-fung, a lawmaker representing the financial sector.Former Hong Kong chief executive Leung Chun-ying said mainland and Hong Kong borrowers should boycott the bank as a result of the dividend being cancelled.Members of the HSBC Shareholder Alliance gather on April 6. Photo: Enoch Yiu alt=Members of the HSBC Shareholder Alliance gather on April 6. Photo: Enoch YiuThe dividend cancellation also renewed calls by investors for HSBC to move its headquarters back to Hong Kong, where it was founded 155 years ago. Hong Kong is the lender's biggest market, but it has been domiciled in the UK since 1993. The bank opted to keep its headquarters in London after a review four years ago."Why is HSBC a Hong Kong bank but it follows the rules of the UK regulator?," another investor who only gave her surname as Lee said. "Does it mean if the UK regulator needs it, it may take all the Hong Kong depositors' money to meet what the UK needs?"Lee, who owns more than 100,000 HSBC shares, said her entire savings is invested in the bank's stock.Posting on the group's Facebook page, activist investor David Webb said he believes HSBC's directors acted legally when they cancelled the dividend. "So don't waste your money on legal action, you have no case," Webb said.The group said it planned to invite former Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong to speak on their behalf.When contacted by the South China Morning Post, Yam said through a representative that he did not own shares in the bank and would not be suitable to join the group."It is all about trust. Many retirees have trust in HSBC and they spend their entire saving to invest in HSBC shares for a long time and relied on its dividends to support their living," said Ken Lui, another founder of the shareholder group. "The suspension of the dividend payment has not taken care of the interests of these investors."Additional reporting by Denise TsangSign up now and get a 10% discount (original price US$400) off the China AI Report 2020 by SCMP Research. Learn about the AI ambitions of Alibaba, Baidu & JD.com through our in-depth case studies, and explore new applications of AI across industries. The report also includes exclusive access to webinars to interact with C-level executives from leading China AI companies (via live Q&A; sessions). Offer valid until 31 May 2020.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 © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
A weekly roundup of banking and financial news in Buffalo ... Pay bump at M&T The majority of M&T Bank's employees in Buffalo are working from home. M&T is providing people who can't work from home with a temporary 15 percent per hour wage increase. "These employees are on the front line every day making a real difference for our customers," M&T spokeswoman Julia Berchou said.
HSBC has said it is delaying the "vast majority" of its planned redundancies to deal with the fallout from the coronavirus pandemic, a memo sent to staff seen by Reuters said. "Because of the extraordinary impact of the COVID-19 pandemic, we have decided to pause, for the time being, the vast majority of redundancies associated with this programme where notices have not already been issued," HSBC CEO Noel Quinn said.
(Bloomberg Opinion) -- Pummeled by the coronavirus, China Inc. now faces another disruption: a global shortage of dollars. Chinese companies are looking at $120 billion of debt repayments this year on their U.S. dollar denominated debt. Real estate developers and industrial companies make up three-quarters of the outstanding $233 billion of junk-rated bonds. There’s another $563 billion of higher-rated debt. The question isn’t just whether they’ll be able to pay their debt. It’s worth wondering how they can access the needed dollars — and at what cost.Globally convulsing markets have put a strain on U.S. dollar funding. In China, signs of tightness in dollar liquidity are emerging, based on 3-month interbank overnight rates and other indicators. Banks are trying to beef up dollar cash positions. Meanwhile, yields on big chunks of Chinese debt have shot to over 15% as investors unload, increasing the cost of borrowing and refinancing. Hedge funds and other asset managers that bought up junk-rated Chinese dollar debt are unwinding those positions. In times like these, investors aren’t discriminating. The pain will persist: Credit markets don’t reprice risk as quickly as equity markets.Debtors need dollars now. These companies have typically resorted to raising more debt to refinance the old. They won’t be able to continue like this. Not only has it gotten prohibitively expensive, it’s hard to find buyers at this point. Take real estate developers. They make up around 60% of the outstanding bonds and primarily rely on onshore yuan revenue from advanced payments and deposits on purchases. With sales down sharply, that cash is waning and swapping it to dollars costs more. Further, regulations restrict raising debt for refinancing. This month, developers have around $4 billion coming due, with smaller repayments until November, when $6.7 billion must be repaid. That comes as companies across emerging markets are staring at $19 trillion in maturities of dollar and local currency loans and bonds over the course of 2020.Even with the People’s Bank of China willing to provide various lifelines, private enterprises’ funding costs remain elevated. Raising more debt in domestic capital markets to repay dollar obligations isn't easy or cheap. Onshore, state-backed borrowers are pushing out smaller ones and flooding the new issuance space.Defaults have been ticking up as Beijing goes into forbearance mode. Estimates from the Institute of International Finance suggest that companies with majority state ownership comprise over 35% of non-financial firms’ debt in China. Add in those with any government backing, and it’s more than 80%. Will Beijing step in for all? Unlikely, but it’s still on the hook for a significant chunk. While onshore investors are agreeing to extend payment terms and to exchange debt for equity, holders of foreign bonds are unlikely to be so forgiving.Tapping Chinese banks for funds isn’t straightforward. They don’t have dollars to hand out en masse. Of the $788 billion of total foreign currency deposits held by financial institutions, $377 billion are corporate deposits. That’s down from a peak two years ago. Banks have more than $800 billion of foreign currency loans on their books. Along with the lending for China’s Belt and Road Initiative, the virus-induced economic shock and rising bad debts mean banks will have to be selective. Investors usually find comfort in the PBOC’s war chest of $3.1 trillion in foreign exchange reserves. Sure, it could — and will — step in to ease the dollar-funding pressure on banks. But the moment the lender of last resort starts tapping reserves, sentiment will be hit, and then it's a question of resilience.In addition, these reserves are held in U.S. Treasuries, agency bonds and the like. Only about $18 billion, or 0.5%, are in cash deposits, mostly at commercial banks, according to HSBC Holdings Plc analysts. Selling those as the broader credit market tanks would only drive more market jitters. Unlike many central banks, China’s doesn’t have a swap line with the U.S. Federal Reserve. So how far will the central bank go?There are other pressure points. The dollar shortage will hit trade credit, crucial for China Inc.’s exports and underlying businesses. In periods of dollar strength and shortage, this leads to outflows as overseas financing to buy Chinese goods dries up. As Rhodium Group’s Logan Wright says, “In the 2008 crisis, this was very severe as trade-credit liabilities were paid down and credit lines were cut.” This time, he says, a dollar shortage in this type of credit would probably lead to “a sharper-than-expected decline in China’s exports” over the next few months. At some point, the credit risk becomes entrenched in balance sheets and coming back is hard. The longer these dislocations last, the worse they get. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
UK banks are stepping up fraud prevention measures to protect customers from scammers eager to exploit the coronavirus pandemic with a whole range of new tricks, including fake sales of medical supplies and bogus government relief schemes. With British households effectively on lockdown, some banks said customers had already been caught out by fraudsters posing as banks, government and even health service providers to persuade victims to hand over passwords or other sensitive data. Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have launched social media campaigns to flag ploys.
The shock from coronavirus to banks is set to be greater but less prolonged than lenders faced in last year's stress test and the financial system remains resilient, the Bank of England said on Tuesday. "Major UK banks are well able to withstand severe market and economic disruption," the BoE's Financial Policy Committee said in a statement from meetings it held on March 9 and March 19. The FPC had already announced that banks can use the capital they hold in their counter cyclical capital buffers (CCYB) to support lending worth up to 190 billion pounds and it indicated on Tuesday that banks could go further if needed.
The European Union's markets watchdog said it may not be "practicable" to record all telephone calls for trading securities because of the coronavirus epidemic. Under EU law, traders must record calls when trading but banks have shut down their main trading floors, forcing dealers to work from back-up sites or even from home, making it harder to record all calls.
Coronavirus is probably the 1 concern in investors' minds right now. It should be. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW. We predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 […]
(Bloomberg Opinion) -- In an incendiary report dispatched from California shortly before Christmas, Carson Block’s Muddy Waters Capital LLC wrote that the debt reported by FTSE 100-listed healthcare company NMC Health Plc was “manipulated and understated.”On Tuesday evening the company’s shareholders, banks and bond holders discovered the mind-boggling extent of those alleged debt shenanigans. Instead of the $2.1 billion of debt reported by the United Arab Emirates’ hospital operator last June, the company really has closer to $5 billion of borrowings, its advisers believe.This is by no means the only ghastly disclosure that NMC has made in recent weeks but it’s by far the most damaging. Apparently some of the money has been used for “non-group purposes,” which explains why instead of swimming in cash, the company seems to have all but run out of it.NMC’s update confirmed it had met its payroll obligations in February. That this wasn’t self-evident speaks volumes about its precarious financial condition. As recently as last June the company reported $500 million of cash on its now discredited balance sheet.Needless to say, this is a shockingly bad time for a private hospital operator to suffer a gigantic financial scandal that calls into question its survival. Like most countries, the UAE has registered scores of coronavirus infections.While it seems likely that the UAE will find the funds from somewhere to bail out NMC and keep its clinics operating, any lingering hopes that NMC shareholders will recoup some value from a takeover look all but shot. The shares are suspended pending full clarification of NMC’s true financial position. NMC’s $360 million, 1.875%-coupon bonds maturing in 2025 are trading at just 22 cents on the dollar — bond-market parlance for “will someone please get me out of here.” The scale of possible financial misstatements at NMC make recent British corporate scandals such as the one affecting cake shop owner Patisserie Valerie Holdings Ltd look almost quaint. But while the sums are several orders of magnitude larger, similar questions must be asked once again: Why were non-executive directors oblivious, what were the auditors (in this case Ernst & Young) doing and how about the banks?NMC worked with Standard Chartered Plc, HSBC Holdings Plc, JPMorgan Cazenove and Barclays Plc to arrange financing, as well as local banks. The company’s massively misleading disclosures are as devastating for them as they are for the reputation of London’s capital markets.Doubtless, those involved will offer up various shades of “how could we have known?” But it was no secret that NMC’s corporate governance was shoddy, and that related party transactions involving the company’s controlling shareholders were extensive. Last year, NMC’s board appointed a special committee to oversee such transactions. Somehow it failed to spot the $2.7 billion in additional debt that NMC appears to be on the hook for. Even the preternaturally skeptical Block seems surprised by the extent of NMC’s debt omissions. If Muddy Waters is shocked, imagine how minority shareholders feel. To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
More than 50 staff at Societe Generale's London office were working from home on Friday as a precautionary measure against the spread of coronavirus, a source familiar with the matter told Reuters. Citigroup has sent 10% of traders who usually work in its Canary Wharf office to a backup site in Lewisham, a source familiar with the move said.
Several banks in Sudan are introducing Visa payment systems as the country seeks to develop its financial sector following decades of isolation, a central bank official and the U.S. financial services company said. Bank of Khartoum, Qatar National Bank and United Capital Bank (Bank Almal) have received approval to start using the systems, which were expected to be launched in about three weeks, said Omar Amrabi, head of electronic banking services (EBS) at Sudan's central bank.
British hedge fund billionaire Chris Hohn has launched a campaign to persuade central banks to starve hundreds of planned coal-fired power plants around the world of finance, aiming to block the projects before they can pose a threat to the climate. Hohn, a big donor to groups working on climate change, set out his concerns in letters to Bank of England Governor Mark Carney, European Central Bank President Christine Lagarde and the chairmen of Barclays, HSBC and Standard Chartered.