London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

If HSBC shareholders are patient, they will reap rewards when coronavirus crisis comes to an end

If HSBC shareholders are patient, they will reap rewards when coronavirus crisis comes to an end

Suspending dividends will help ensure banks have more liquidity to weather the financial storm, which will benefit shareholders in the longer run. Dividend payouts are not an entitlement anyway

To those people moaning about the non-payment of dividends by HSBC and Standard Chartered Bank, I say this: there are varying degrees of risk in investing in the stock market. There is no entitlement. The aim of the Bank of England in directing UK banks to suspend dividends is to help ensure that banks have sufficient liquidity to assist businesses to weather the storm in the current difficult financial climate, and to help those businesses to retain jobs.

Those moaning investors that hold 10,000 or 20,000 bank shares should be able to afford to make sacrifices for the common good. I suggest that those investors hold on to their bank shares to take advantage of the inevitable rise in their value when the Covid-19 crisis ends, as it surely will.

Eric Taylor, Sai Kung


Demand for bonus shares displays a lack of understanding

Recently, many British banks, including HSBC, have halted dividend payments and/or repurchases of stocks to address the impact of the Covid-19 outbreak.

Quite a number of HSBC shareholders were dismayed and even angered by the bank’s decisions, claiming that HSBC must pay their dividends as before, or offer bonus issues. They even have threatened legal action against the bank. As a student studying accounting and investment for a long time, I am amused by these investors’ absurd actions.



I would like to emphasise some basic principles about shares. First, unlike coupon payment of debentures, dividend to ordinary shareholders is simply not obligatory.

Second, can issuing bonus shares bring true benefit to these shareholders? Unfortunately, no. Issuing bonus shares is just an accounting trick. You have more shares from the firm, but the value behind each share also decreases correspondingly, which is similar to cutting a pizza into smaller pieces.

If investors ignore the rules of finance, that is their loss.

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×