HSBC

HSBC’s Latin American woes just show no sign of letting up.

While strong performances from the bank’s two biggest markets – Hong Kong and the UK – helped boost overall pre-tax profit by 30 per cent during the third quarter, business in Latin America posted another quarter of double digit decline as bad loans from Mexico and Brazil continue to mount. Read more

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Commenting on the Russian revolution, Joseph Stalin is alleged to have said, “You can’t make an omelette without breaking a few eggs.” What then is the price of eggs?

HSBC has totted up the lost output of seven states most hit by the Arab Spring, and estimates a loss of $800bn by the end of 2014. Read more

It was a rough first half for HSBC. While the bank’s two biggest markets – Hong Kong and the UK – turned in strong performances in the first six months of the year, underlying profits from Latin America more than halved as losses from bad loans in Brazil and Mexico jumped.

Several other key Asian markets – including China, India, Indonesia and Vietnam – also posted double-digit declines. Read more

HSBC ceo Stuart Gulliver on Wednesday pledged to stick the tough strategy he launched in 2011, with more cost cuts combined with boosting financial commitment to emerging markets.

In a presentation of plans for 2014-16, he delivered a difficult message for employees, with a target to reduce jobs from 261,000 last year (down from 295,000 in 2010) to 240,000-250,000.

But investors will be happy with the promise of a return on equity target of 12-15 per cent, and a commitment to push 75 per cent of the growth in risk-weighted assets to emerging markets. The shares barely moved but are up by 12 per cent since a recent low in April and by 36 per cent in the last 12 months. Read more

HSBC, the giant of emerging markets’ banking, disappointed investors with a 6 per cent drop in pre-tax profits to $20.6bn compared to forecasts of a 5 per cent gain to around $23bn.

But with the biggest surprise coming from a $5.2bn accounting adjustment on the value of HSBC’s own debt, Monday’s results weren’t too much of a shock. Nonetheless, the shares fell 2.5 per cent, dragged down not only by the numbers but also by China property market fears. Read more

The invasion of Central America by Colombia’s major financial groups rumbled on on Tuesday after Bancolombia, the country’s leading bank, snapped up HSBC’s operations in Panama for $2.1bn. Read more

Another data point out today is undoubtedly going to encourage those hoping to see evidence that the green shoots of China’s economic recovery have sturdy roots.

This month, the HSBC/Markit China flash purchasing managers’ index, a private survey of the health of the manufacturing sector, hit its highest point in two years, as Chinese manufacturers accelerated production and began some restocking. Read more

From time to time concerns are raised that Hong Kong could one day be eclipsed by financial centres on the Chinese mainland, notably Shanghai. But such fears are overblown according to a new report from HSBC’s Donna Kwok, which says Hong Kong has quite enough advantages to avoid being put in the shade any time soon. Read more

HSBC on Thursday finally responded to the welter of speculation about the planned sale of its $9.4bn stake in Ping An, the Chinese insurer.

And it seemed to dismiss suggestions that the deal might be off because of widely-reported concerns that the Chinese state bank financing the deal might pull out. It said, in short, that it had nothing to add to its December 5 statement announcing the sale. Will this be the last word in this complicated saga? Read more

Citigroup São Paulo

Photo: Bloomberg

Citigroup’s announcement of sweeping cuts after less than two months under Michael Corbat, the bank’s new chief executive, may have surprised by its timing. Nevertheless, the fact that Citi is paring back or closing down its operations in several emerging markets has an air of inevitability about it.

But is Citi aping HSBC’s plan of focusing on only a few, profitable emerging markets? Or is it dressing up a hurried retreat as a carefully-honed strategy? Read more

HSBC‘s $9.4bn deal to sell its 15.6 per cent stake in Ping An to Thailand’s Charoen Pokphand Group is clearly good news for the British bank. It should also be good news for the Chinese insurer, assuming that Charoen Pokphand follows HSBC’s example in the role of long-term stable foreign shareholder.

Investors in Ping An are betting that it will, with the shares jumping 5.6 per cent in Hong Kong on the news and later closing up 4.1 per cent. HSBC, which made its intentions clear weeks ago, saw its shares rise 1 per cent. Read more

Shares in HSBC jumped 1.4 per cent in Hong Kong on Monday after the bank confirmed what investors had long suspected – its $9.5bn stake in Ping An Insurance, China’s second-biggest insurer, is up for sale.

The bank issued a statement after the Hong Kong Economic Journal, a Chinese-language newspaper, reported that Thai billionaire Dhanin Chearavanont, who controls the Charoen Pokphand Group, was among the potential purchasers.

But its not a done deal and shares in Ping An fell 2.7 per cent as investors weighed the consequences of the company losing its prestigious connection with one of the world’s best-known banks. Read more

A slew of PMI numbers for Asia, and precious little sign of economic recovery in any of them.

For the bulls there’s the crumb of comfort that there were no unexpected shocks in the figures. But for bears there was much more to chew upon – with factories in China and elsewhere struggling in the face of weak export demand from the US and Europe.

East Asian markets were mostly closed for a holiday. Those that were open, including Jakarta and Mumbai, drifted lower in cautious trading. Read more

HSBC’s decision to sell off its retail units in Colombia, Peru, Uruguay and Paraguay is welcome news to bankers looking for a foothold in some of the world’s more attractive prospects.

Colombia’s GNB Sudameris appears to already have the jump on rivals for HSBC’s affections, however, with local reports suggesting it is in advanced talks and may have even already clinched a deal. Read more

Next for the chop in HSBC’s $3.5bn restructuring programme are retail operations Colombia, Peru, Uruguay and Paraguay. Read more

As far as investors are concerned, the lights are still on amber in emerging markets.

Flows into EM funds in the last week have gone almost entirely into hard currency bonds, with very little trickling into local currency bonds or equities. After this year’s early rally and the sharp sell-off that followed in both equities and currencies, investors are taking care, but are still on the look-out for the extra returns possible in EMs. Read more

HSBC is hoping to extend its red and white tentacles across Oman, the oil-rich Gulf state, after it agreed to merge its local unit with publicly-traded Oman International Bank.

HSBC plans to take a 51 per cent stake in the combined entity which will be re-named HSBC Bank Oman, the company said today. As part of the deal, HSBC will inject $97.4m into the joint lender. But why merge when other banks just expand? Read more

HSBC has been quick to score brownie points with the UK Treasury by drawing up plans for London’s first renminbi bond issue – and the first outside mainland China and Hong Kong.

Even before the bank itself published an official release, chancellor George Osborne jumped on the story on Wednesday and crowed: “This morning, we saw the launch of the first RMB bond outside of Chinese sovereign territories. And it happened here in London.” Read more

A positive prognosis for emerging markets in 2012 – but no thanks to China.

That’s the upshot of HSBC’s report on its quarterly emerging markets index for Q1 2012, which showed a “gentle improvement”, as one analyst put it, driven mainly by services rather than manufacturing. Read more

HSBC may be cutting back in emerging markets that it sees as non-strategic. But in those it deems strategic, it is beefing up.

On Thursday it announced plans to buy the UAE-based onshore retail and commercial operation of Lloyds, the British bank which is under some pressure to bolster its balance sheet. It’s not a big deal by world banking standards, involving gross assets of just $769m. But when it comes to implementing a strategy every little bit helps, for both HSBC and Lloyds. Read more