HBSC Sharpens Focus on Asia -- Update
23 Febrero 2021 - 12:14AM
Noticias Dow Jones
By Simon Clark and Quentin Webb
HSBC Holdings PLC, one of the world's largest banks, said it
would pour about $6 billion of extra investment into Asia in the
next five years, as it doubles down on its core business.
The London-based bank, which makes most of its profit in Hong
Kong and mainland China, said Tuesday that earnings fell 35% to
$3.9 billion last year as the coronavirus pandemic roiled the
global economy. HSBC set aside $8.82 billion in provisions for bad
loans last year versus less than $3 billion in 2019.
Chief Executive Noel Quinn is leading the reorganization of the
bank. Geopolitical tension between China and Western countries has
strained his ambition for the bank to be a financial bridge between
the most populous nation and the rest of the world. HSBC last year
supported China's imposition of a national security law in Hong
Kong, which the U.S. and British governments opposed.
"We plan to focus on and invest in the areas in which we are
strongest," Mr. Quinn said. In a presentation to investors, the
bank said it would invest an additional $6 billion in its
wealth-management and international wholesale businesses to drive
growth in Asia. HBSC will also spend more to digitize faster and
said it planned to build on its strengths in sustainable
finance.
The bank reported a return on tangible equity of 3.1%, down from
8.4% a year earlier, and dropped its previous goal of reaching a
10% to 12% return on this basis by 2022. Instead, it will target a
return of 10% or more in the medium term.
At the same time, HSBC said it may unload some retail
operations. HSBC said it was "exploring organic and inorganic
options" for its U.S. retail business and was in negotiations over
a sale in France, which is likely to generate a loss if
concluded.
HSBC, which has been considering disposing of its French retail
bank since at least 2019, is in talks with private-equity firms
about a sale, people familiar with the situation said. Its
expansion into France was built on the 2000 purchase of Credit
Commercial de France for $10.6 billion.
Founded in Hong Kong and Shanghai in 1865, HSBC expanded
world-wide in the 1990s and early 2000s through costly takeovers,
many of which it had to unwind. The bank took a big step into the
U.S. in 2003 with the $16 billion takeover of subprime consumer
lender Household International Inc., but the acquisition saddled
the bank with billions of dollars of soured mortgages and lawsuits
following the global financial crisis of 2008. HSBC sold its U.S.
credit-card business to Capital One Financial Corp. in 2012.
The U.S. expansion brought more trouble for HSBC when the
Justice Department accused it of laundering proceeds from drug
trafficking in Mexico and stripping data from transactions
involving sanctioned nations like Iran to avoid detection. The bank
paid a then-record $1.9 billion in 2012 to settle the allegations.
HSBC admitted wrongdoing but avoided a guilty plea or prosecutions
of its executives.
In the U.K., meanwhile, HSBC faces uncertainty caused by the
country's departure from the European Union.
HSBC's London-listed shares lost more than a third of their
value in 2020 but have risen 14% in the year through Monday. On
Tuesday in Hong Kong, its shares jumped more than 4% in early
afternoon trading.
HSBC said it would pay a dividend of 15 cents a share, following
an earlier indication it would make a conservative payout if
circumstances allowed. It had put dividend payments on hold to
comply with British regulatory demands, angering some shareholders
in Hong Kong. The Bank of England's Prudential Regulatory Authority
lifted the ban on U.K. banks paying dividends in December.
Write to Simon Clark at simon.clark@wsj.com and Quentin Webb at
quentin.webb@wsj.com
(END) Dow Jones Newswires
February 23, 2021 00:59 ET (05:59 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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