HSBC 02 (0005) (Jun 10 - Dec 24)

[winston]

HSBC heads for $11 billion profit as revamp takes shape by Steve Slater

LONDON (Reuters) - HSBC Holdings Plc <HSBA.L> should unveil a half-year profit of near $11 billion on Monday, flat from a year earlier as weak investment bank trading and wobbly U.S. and European economies offset growth in Asia.

New HSBC CEO Stuart Gulliver is overhauling Europe's biggest bank by slashing costs by up to $3.5 billion, selling its U.S. credit card arm and other assets, and retreating from countries where it is sub-scale.

The aim is to sharpen the focus on Asia and investors want to see progress made on that plan.

HSBC is the first of Britain's big banks to report and should show a pretax profit for the six months to the end of June of $10.9 billion, compared with $11.1 billion a year earlier, according to the average of forecasts from 12 banks and brokerages polled by Reuters.

Earnings will be hurt by a slump in fixed income trading in the second quarter, which has hit rivals including Credit Suisse <CSGN.VX> particularly hard. Revenue from HSBC's global banking and markets unit is likely to fall 8 percent on the year to $10 billion, analysts at Citi forecast.

A stuttering U.S. economy could also slow the improvement in bad debts at HSBC's U.S. consumer loans portfolio, which it is running down, analysts said.

Gulliver unveiled his far-reaching plan in May to slash costs and cut back in retail banking to revive flagging profits and returns.

Gulliver intends to sell HSBC's U.S. credit card portfolio, which has more than $30 billion in assets, a move which would free up capital. Capital One Financial Corp <COF.N> and Wells Fargo <WFC.N> are among the bidders, sources have said.

Another suitor could be Barclays <BARC.L>.

HSBC is also looking to sell upstate New York branches as it shrinks its network of 475 U.S. branches. Altogether it is looking to sell, shut or slim down retail banking in 39 countries. So far, it has said it will exit Russia and Poland.

( Exit Russia ? )

The bank is likely to axe thousands of jobs as part of the overhaul, but it is probably too early to see an improvement in the cost line, analysts said.

Pretax profit will include a negative adjustment on the value of debt the bank carries, expected to be around $600 million. Underlying profit of $11.5 billion would be up almost a fifth from a year ago.

Source: Reuters US Online Report Business News

[winston]

Not vested. So easy to just cut 30,000 positions ? Maybe they are really inefficient in the first place Or maybe they have too many Chiefs rather than Indians ?

HSBC Says to Cut 30,000 Jobs

LONDON (Reuters) - Global banking group HSBC said on Monday it would eliminate a further 25,000 jobs between now and 2013 as part of a broader cost-cutting drive.

"There will be further job cuts," Chief Executive Stuart Gulliver told reporters on a conference call.

"Another 25,000 roles will be eliminated in addition to the 5,000 already announced."

Source: Reuters US Online Report Top News

[iam802]

http://www.businessweek.com/news/2011-0 ... costs.html

Notes :
- It was reported that 76% of profits come from Asian, Latin American and Middle Eastern ; more bets on emerging.

- More job cuts is 'good'. I think they see a slow down over the next 2-3 years to come and stricter capital rules to come. (<<< Basel III compliance kicking in??)

- Winston can play golf till 2013

[LenaHuat]

Old Europe is what it is - "old" and "rambling". Her citizens are just living on 'old' money.
Eastern Europe is not the rising phoenix. Basel III will bite really hard. Japan has not woken up to the truth about Fukushima. That truly leaves the emerging markets.

[winston]

not vested

DJ MARKET TALK: HSBC +0.6%; Stands Out Vs European Bank Peers - Macq

1131 [Dow Jones] HSBC (0005.HK) perhaps is the Hong Kong blue chips that has more to win or lose, depending on the outcome of the weekend EU summit.

For investors looking buy HSBC or set up long HSBC/short other European banks pair trade, consider this:

Macquarie continues to rate HSBC as a conviction buy, believing the bank "can achieve organic earnings growth through cost savings, and given its balance sheet and funding position, HSBC's quality stands out relative to other European banks."

HSBC is up 0.6% at HK$63.30 vs the HSI's 0.1% gain.

Source: Dow Jones Newswire

[winston]

not vested

HSBC says outlook "very challenging," profit falls by Steve Slater

LONDON (Reuters) - HSBC Holdings <HSBA.L> cited a dire outlook for the global economy as it reported a larger-than-expected drop in third-quarter profits, hit by lower investment banking income and a rise in bad debts in the United States.

Shares in Europe's biggest bank were some 3 percent weaker in early trading on Wednesday, after it said its underlying pretax profit was 36 percent lower at $3 billion in the three months to the end of September.

HSBC <0005.HK> Chief Executive Stuart Gulliver aims to cut annual costs by $3.5 billion and sharpen the bank's focus on Asia, quitting countries where the bank lacks scale as he attempts to revive profitability.

Its cost efficiency ratio for the first nine months of the year also worsened, to 54.6 percent from 54.0 percent last year, while it had reduced headcount by 5,000 since the first quarter.

Source: Reuters US Online Report Business News

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[winston]

Wolf ! Wolf !

HSBC Says May Leave UK, Warns on Global Slowdown

LONDON (Reuters) - HSBC <HSBA.L> said costly new capital rules might force it to leave Britain, a threat it has made before, but which this time came with a bigger-than-expected fall in profit and a warning of “very challenging” conditions ahead.

Extra British regulations could cost $2.5 billion a year, which the bank said on Wednesday may be "too high" to stay, though it would delay its decision to move its headquarters back to Hong Kong or elsewhere until at least next year.


http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[iam802]

I think there's a possibility.

It may not move entirely out of London since that is one of the largest (if not the largest) financial market in the world.

However, it can definitely, systematically shift back office and middle office operations to Asia.

If I recall, the CEO is already based in HK.

Given the market conditions, the management must be hard pressed to find new growth area or cost cutting initiatives.

It seems to me most companies are betting that the emerging markets will be the ones providing the new growth in the coming years.

The only question is the timeframe.

[winston]

If I recall, the CEO is already based in HK.

The previous CEO threatened to moved the HQ to HK. But just NATO.

And the current CEO is still based in the UK.

Talk is easy. Rental in London or HK is cheaper ? Or maybe they can move to New Territories

[winston]

not vested

Daryll Guppy on CNBC:-

Downtrend with the first stop at HK$60