London Daily

Focus on the big picture.
Thursday, Dec 26, 2024

HSBC says UK buyout boosted profit by $1.5bn

HSBC says UK buyout boosted profit by $1.5bn

Banking giant HSBC says its profits got a $1.5bn (£1.2bn) boost from the purchase of collapsed Silicon Valley Bank's British business (SVB UK).
Europe's biggest bank posted a pre-tax profit of $12.9bn for the three months to the end of March.

That is more than three times the amount it made for the same time last year.

In March, HSBC bought SVB UK for a nominal £1 ($1.25), in a deal led by the government and the Bank of England.

The London-headquartered lender said the profit included a "provisional gain of $1.5bn on the acquisition of Silicon Valley Bank UK Limited".

"We remain focused on continuing to improve our performance and maintaining tight cost discipline, but we also saw an opportunity to invest in SVB UK to accelerate our growth plans," group chief executive Noel Quinn said.

The bank also got a boost from the reversal of its plan to write-off $2.1bn due to the sale of its French business, as that deal may no longer be completed.

HSBC announced its first quarterly payout to shareholders since before the pandemic in 2019 and said it would buy back $2bn of its shares.

It also said the completion of the sale of its business in Canada is likely to be delayed.

The planned $10bn sale, which was originally expected to be completed by the end of this year, is now likely to go through early next year.

The proposed deal is a key part of its strategy to pull back from slow-growing Western markets.

HSBC's strong performance comes against the backdrop of the global banking sector being rocked by the collapse of Silicon Valley Bank and Signature Bank in March and the forced buyout by Swiss banking giant UBS of rival Credit Suisse.

On Monday, US regulators seized First Republic Bank and sold its assets to Wall Street giant JPMorgan Chase.

The move was aimed to resolve the biggest failure since of a US bank since the 2008 global financial crisis and draw a line under weeks of turmoil in the industry.

In recent months, pressure has grown on HSBC from its biggest shareholder, Chinese insurance giant Ping An.

Ping An has called for HSBC to spin off its Asian operation to increase the amount investors make out of the business there.

HSBC is still run from its headquarters in London but makes the majority of its profits in Asia. These profits effectively subsidise some of the bank's loss-making operations in Europe and the US.

Ping An has argued that this is unfair and its solution is to break up HSBC, giving Asian investors a larger share of the profits.

"If you look at HSBC's share price for the past eight years, Ping An's investment hasn't been a particularly good one. A break-up may enhance the value of the bank for shareholders in Asia," says Kenny Wen, head of investment at KGI Asia in Hong Kong.

HSBC has urged its shareholders to vote against the proposal at its annual general meeting, which is due to take place in Birmingham on Friday.

"Currently HSBC clearly has not earned the right to simply bat away calls for change," Manus Costello from Autonomous Research in London said.

A break-up, however, would face "formidable obstacles, including significant economic and political hurdles," he added.
Newsletter

Related Articles

0:00
0:00
Close
The Closure of the Global Engagement Center: Controversy, Claims, and Conclusions
The Rise of Princess Charlotte: A New Star in the Royal Firmament
Diplomatic Waters: Finland's Seizure of a Russian-linked Vessel in the Baltic Sea
Reform UK Declares Itself the 'Real Opposition' Amid Membership Surge
Pope Francis Opens Holy Door at Major Italian Prison
Britain’s ‘Wild West’ of Weight-Loss Jab Promotions Faces Growing Scrutiny
Pope Francis Urges Unprecedented Dialogue Amid Escalating Ukraine-Russia Tensions
Dozens Survive Kazakhstan Passenger Jet Crash Amid Tragedy
Kazakhstan Air Disaster: Dozens Survive as Authorities Probe Fatal Plane Crash
Postal Workers Demand Government Probe Into Royal Mail 'Fake Deliveries' Scandal
Explosion Sinks Russian Cargo Ship Ursa Major in Mediterranean
Mystery Shrouds U.S. Citizen Gene Spector's 15-Year Espionage Sentence in Moscow
Zelenskyy Alleges 3,000 North Korean Casualties in Russian Conflict
North Korea's Unseen Hand: Over 1,000 Troops Suffer Casualties in Ukraine
Discovery of 50,000-Year-Old Baby Mammoth in Siberia Fascinates Scientists
Magdeburg Attack Fuels AfD's Political Momentum Amid Rising Tensions
In Magdeburg, Germany, a man is arrested by the police for declaring, "I am a Christian."
UK News Roundup: London Shooting, Travel Disruptions, and Legal Battles
UK Economy Teeters on Recession's Edge Amid Revised Growth Figures
Australian Man Captured in Ukraine Conflict; Government Seeks Answers
Zelenskyy’s Push for NATO: A High-Stakes Gamble for Eastern European Stability
Slovak Pragmatism or EU Discord: Prime Minister Fico’s Polarizing Moscow Engagement
The Ripple Effects of a Russian Victory in Ukraine: A Global Tectonic Shift
U.S. Government Shutdown Averted by Last-Minute Agreement
Tragedy in Magdeburg: Saudi Doctor's Alleged Terror Attack at German Christmas Market Ignites Global Security Debate
Tragedy Strikes at Magdeburg Christmas Market: Terror Attack Leaves Five Dead
Texas Congresswoman Kay Granger Discovered in Nursing Home Following Six Months of Inaction
Prince William to End Feudal Land Restrictions in Duchy of Cornwall, but Controversies Remain
British police appear unprepared to deal with usual suspects
Russia's Ballistic Blitz on Kyiv Sends Shockwaves Through Global Stability
Multiple Tragedies and Tensions Mark Global Events: A Closer Look
Elon Musk's AfD Endorsement Ignites Controversy from neo-Nazis who accuse the AfD of being what they themselves are
Ukraine Claims Unprecedented Russian Losses: The Truth Behind Wartime Statistics
Federal Reserve Chair Powell: "We are prohibited from owning Bitcoin and are not seeking any changes to that law."
A Democratic congresswoman with blue and black hair is having a meltdown over "President Musk."
A sizable group of unauthorized migrants is traveling through Mexico with the aim of reaching the USA before Trump assumes office.
Beatles Reunion Electrifies London: Paul McCartney and Ringo Starr Ignite O2 Arena with Surprise Performance
Starmer's Envoy Engages Trump Team as UK Seeks Strategic U.S. Partnership
Britain's Retail Rebound Falters as Black Friday Splurge Dissipates
Bank of Japan's Bold Reckoning: A Decade of Unconventional Policy Under Scrutiny
Republican Discord Threatens Government Shutdown Amid Holiday Season
French Retiree Dominique Pellico Convicted for Recruiting 72 Men to Assault Wife Over a Decade
Putin Defends War Strategy as Global Tensions Rise
Putin Claims Progress as Tensions Rise: Conflict in Ukraine Intensifies
Putin's Paradox: Claiming Strength Amidst Sanctions and Isolation
Water as a Weapon: The Contentious Struggle for Survival in Gaza
Syria's Future: A Fight for Democracy or Another Cycle of Oppression?
UK Considers Sending Troops to Ukraine: A Strategic Move or Intensifying The Proxy War?
Renewed ISIS Threat Puts Syria’s Cultural Heritage in Peril
Escalation in Moscow: High-Profile Assassination and International Tensions Intensify
×