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HSBC Misses Profit Estimates on Revenue Drop, Deepens Cost Cuts

HSBC Holdings Plc’s fourth-quarter profit missed estimates on a surprise drop in revenue as the bank said it will boost cost-cutting measures and extend a stock buyback.

Adjusted pretax profit, which excludes one-time items, jumped 39 percent to $2.62 billion, Europe’s largest bank said in a statement on Tuesday. That missed the $3.78 billion average estimate of six analysts compiled by Bloomberg News. Removing the adjustments, HSBC reported a $3.4 billion pretax loss for the fourth quarter. The bank’s shares fell in Hong Kong by the most since November.

Chief Executive Officer Stuart Gulliver is battling five years of declining revenue as he pares back HSBC’s sprawling global footprint and reduces expenses. The bank increased its cost-cutting target by $1 billion to $6 billion of savings, while saying it faces more than $3 billion of revenue headwinds in 2017, including currency movements and record-low interest rates in the U.K.

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HSBC Says Swiss Bank Tax Probe Could Cost More Than $1.5 Billion

By Gavin Finch
February 20, 2018, 6:46 PM GMT+8

HSBC Holdings Plc said it could face penalties exceeding $1.5 billion stemming from multiple investigations into claims that its Swiss private bank unit helped clients evade paying taxes.

Authorities in the U.S., Belgium, Argentina, India, Spain and elsewhere are probing allegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation at the Swiss private bank, HSBC disclosed in its annual report Tuesday. The bank paid the French government 300 million euros ($370 million) in November to settle allegations that it helped clients hide assets from local tax authorities.

HSBC has been dogged by a series of criminal investigations. Last month, the firm paid the Justice Department $100 million to settle allegations it had rigged clients’ currency transactions, part of a probe that led to the conviction of one former executive. The London-based bank had only just been released from a five-year deferred-prosecution agreement with the Justice Department for helping Mexican drug cartels launder money and breaching international sanctions by doing business with Iran.

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HSBC to cut 2 per cent of its workforce as lender looks to reduce costs
* Lender is looking to trim its wage costs by 4 per cent in 2019
* HSBC expects severance costs of US$650 million to US$700 million over the course of the year

Chad Bray  
Published: 4:57pm, 5 Aug, 2019

HSBC said it plans to slash as much as 2 per cent of its workforce as the lender looks to reduce its costs in a more challenging market environment.

As of June 30, the bank, which is based in London, but generates more than half of its revenue in Asia, employed about 238,000 people worldwide.

As part of its second quarter results, the bank said that it had set aside severance costs of US$248 million in the first half of the year related to its efforts to cut costs. The company said it plans for severance costs of US$650 million to US$700 million over the course of the year, equivalent to about 2 per cent of its workforce.

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HSBC to cut up to 10,000 jobs in drive to slash costs: FT

Reporting by Shubham Kalia and additional reporting by Rama Venkat in Bengaluru; Editing by Daniel Wallis and Louise Heavens
OCTOBER 7, 2019 / 3:21 AM

(Reuters) - HSBC Holdings Plc (HSBA.L) is planning to cut up to 10,000 jobs, more than 4% of its workforce, as interim Chief Executive Officer Noel Quinn seeks to reduce costs across the banking group, the Financial Times reported on Sunday.

The plan represents the lender's most ambitious attempt in years to cut costs, the newspaper said here citing two people briefed on the matter. It said the cuts will focus mainly on high-paid roles.

HSBC declined to comment on the FT report.

The bank had 237,685 full-time employees at the end of June 2019, according to its 2019 interim report.

HSBC could announce the beginning of the latest cost-cutting drive and job cuts when it reports third-quarter results later this month, the FT said, citing one person briefed on the matter.

Quinn became interim CEO in August after the bank announced the surprise departure of John Flint, saying it needed a change at the top to address “a challenging global environment.”

Flint’s exit was a result of differences of opinion with chairman Mark Tucker over topics including approaches to cutting expenses, a person familiar with the matter told Reuters in August.

Any job cuts implemented as part of the latest plan would come on top of the redundancies announced earlier, the FT said.

HSBC said it would be laying off about 4,000 people this year, and issued a gloomier business outlook due to an escalation of a trade war between China and the United States, an easing monetary policy cycle, unrest in its key Hong Kong market and Brexit.

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HSBC to quicken cost cuts after third-quarter profit trails estimates on weaker retail banking, global markets

Hong Kong enters recession as protests show no sign of relenting


Financial Results 3Q2019


• Reported profit before tax in Asia up 4% to $4.7bn in 3Q19, with a resilient performance in Hong Kong.

• Growth in both loans and advances to customers and customer accounts, up 4% and 2% respectively on a reported basis compared with 3Q18, and up 7% and 5% on a constant currency basis.

• Commercial Banking (‘CMB’) and Retail Banking delivered revenue growth compared with 3Q18. Continued momentum in Global Private Banking (‘GPB’) with net new money of $19bn in 9M19. Performance in Retail Banking and Wealth Management (‘RBWM’) in HSBC UK in 3Q19 was adversely impacted by additional customer redress charges.

• Global Banking and Markets (‘GB&M’) performance continued to reflect low levels of client activity in Global Markets, although our transaction banking franchises delivered a resilient performance. In 3Q19, GB&M’s adjusted revenue in Asia increased by 9% compared with 3Q18 and represented over 50% of total GB&M adjusted revenue.

• Continued strong capital levels, with common equity tier 1 (‘CET1’) ratio of 14.3%, including the completion of a $1bn share buy-back.

HSBC Plans to Cut 35,000 Jobs in Tucker’s Sweeping Overhaul
18 February 2020, 12:40 GMT+8

HSBC Holdings Plc is set to slash about 35,000 staff from its workforce and is taking $7.3 billion of charges in its most dramatic overhaul under Chairman Mark Tucker.....
On 31 March 2020, HSBC announced it was cancelling the fourth interim dividend for 2019 amid the economic uncertainty surrounding the coronavirus pandemic, and would not be paying the first three interim dividends for 2020. The Group will review dividend policy later in 2020.

Share price closed on 2 Apr 2020, at HK$ 38.90 .

Without dividend payment for one year , its is difficult to judge where is the support level. At $35 ?
HSBC HK shareholders mull legal action over dividend suspension
Statement in relation to HSBC Holdings plc

15 May 2020

We refer to the announcement made by HSBC Holdings plc (HSBC) on 31 March 2020 relating to the cancellation of its fourth interim dividend for 2019 (Cancellation) and the suspension of payment of any further dividend until the end of 2020 (Suspension).

The Securities and Futures Commission (SFC) has received a large number of enquiries and complaints from the investing public and professional bodies in Hong Kong in relation to the Cancellation and the Suspension which raised (among others) the following key issues:

The SFC does not usually comment on individual cases. However, in light of the significant public interest in this matter, the SFC is issuing this statement to inform the public about the actions that the SFC has taken, including its communications with the Bank of England’s Prudential Regulation Authority (PRA) and HSBC.

HSBC is listed in a number of jurisdictions, including a dual primary listing on the London Stock Exchange and on The Stock Exchange of Hong Kong Limited (SEHK). The SFC’s regulatory ambit extends to regulating HSBC as a listed company on the SEHK pursuant to the laws and regulations that the SFC administers, primarily the Securities and Futures Ordinance (SFO) and related subsidiary legislation.

Matters relating to the banking and prudential supervision of HSBC lie outside the SFC’s regulatory ambit. The PRA is responsible for the regulation and supervision of banks, building societies, credit unions, insurers and major investment firms in the UK. It acts as the primary supervisor for a number of UK-headquartered international banking and insurance groups, including the HSBC group.

The SFC understands and appreciates the concerns raised by the investing public and professional bodies in Hong Kong. We have since communicated with HSBC and the PRA to establish the circumstances leading up to the Cancellation and the Suspension. In addition, we have also conveyed to them the views of sections of the investing public in Hong Kong with respect to the Cancellation and the Suspension, including: (i) the overall impact on Hong Kong retail shareholders; (ii) reliance of many Hong Kong retail shareholders on dividend distributions by HSBC as a form of regular income; and (iii) that the Cancellation was made after the ex-dividend date in relation to the fourth interim dividend.

The SFC understands that the PRA’s request for the Cancellation and the Suspension, and HSBC’s agreement to such request, was made after carefully considering and balancing various factors, including the following:

Many investors had traded HSBC shares (Shares) on the basis that Shares held on the day immediately prior to the announced ex-dividend date would be entitled to the fourth interim dividend. Certain complaints also alleged that HSBC had failed to safeguard shareholders’ interests and had caused substantial loss to shareholders in terms of stock value and dividend payout, and accordingly, shareholders should be compensated. Some complaints questioned whether HSBC had disclosed its discussions with the Bank of England in respect of the cancellation of the fourth interim dividend in a timely manner.

The PRA’s general objective is to promote the safety and soundness of the firms it regulates. In line with regulators internationally, the PRA has been monitoring the impact of COVID-19 on PRA-regulated firms and their groups and has put in place various measures to advance its general objective during this difficult time. As at 31 March 2020, there was a high level of uncertainty as to the duration and impact of the economic implications of COVID-19 on a global basis. The PRA noted that there was a real risk of a very rapid reduction in economic activity globally in response to restrictions imposed by a number of governments and a particular need for additional lending to help real economies bridge the gap to the eventual removal of those restrictions. The PRA considered the need for early action to preserve the capital position of firms in the face of continuing economic uncertainty. Further, the PRA has the necessary statutory power to require HSBC to take capital preservation actions and it was clear that the PRA stood ready to exercise such powers should HSBC not agree to take the requested action. The material implications for HSBC’s shareholders, including the significant number of retail
Statement in relation to HSBC Holdings plc | Securities & Futures Commission of Hong Kong

Further, according to the board of HSBC, HSBC’s long-term interests were best served by acceding to the PRA’s requests, instead of requiring the PRA to exercise its statutory powers, and it would not have been in the best interests of HSBC’s shareholders or other stakeholders to refuse to agree to the PRA’s request.

The SFC also notes that HSBC received the PRA’s direct request for the Cancellation at around 5:03p.m. (London time) on 31 March 2020 and HSBC published its announcement on the Cancellation prior to trading in Hong Kong on 1 April 2020.

The SFC has conducted a careful examination of all information available to it to date (including, but not limited to, the matters mentioned above), and assessed it against the threshold criteria for investigating matters under the SFO such as insider dealing, failure to disclose inside information, disclosure of false or misleading information and unfair prejudice to shareholders, and has concluded that there is at present no ground on which regulatory action should be pursued under the SFO in respect of the Cancellation and the Suspension.
Rev USD26b (vs 29b)
Operating profit USD3b (vs 11b)
Profit after tax USD3b (vs 9b)
No dividend for FY2020

“Our first half performance was impacted by the Covid-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility. Despite this, our Asia franchise showed resilience, and our Global Markets business delivered strong growth compared with last year’s first half. Having paused parts of our transformation programme in response to the Covid-19 outbreak, we now intend to accelerate implementation of the plans we announced in February. We are also looking at what additional actions we need to take in light of the new economic environment to make HSBC a stronger and more sustainable business.”
“Current tensions between China and the US inevitably create challenging situations for an organisation with HSBC’s footprint. We will  ace any political challenges that arise with a focus on the long-term needs of our customers and the best interests of our investors.”

Stay home and stay healthy, everyone.
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