|Bid||519.60 x 0|
|Ask||519.80 x 0|
|Day's range||511.50 - 532.30|
|52-week range||5.76 - 741.00|
|Beta (5Y monthly)||0.65|
|PE ratio (TTM)||17.70|
|Earnings date||28 Apr 2020|
|Forward dividend & yield||0.40 (7.16%)|
|Ex-dividend date||27 Feb 2020|
|1y target est||9.20|
U.S.-based banks and brokers are in discussions with federal regulators about allowing staff to work from home and other business continuity arrangements amid the spread of the coronavirus, the head of a top financial trade group said on Thursday. The industry is reviewing and updating contingency plans in order to minimize any potential disruption to the financial markets that could be caused by personnel being unable to work onsite, said Kenneth Bentsen Jr., said chief executive of the Securities Industry and Financial Markets Association (SIFMA). In addition to remote working arrangements, financial firms could potentially move staff to backup locations away from major cities, he said.
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(Bloomberg Opinion) -- Standard Chartered Plc may have many failings. At least it has a leader.The London-based emerging markets bank run by Bill Winters hasn’t had the best of years, and the outlook, with so much exposure to virus-affected Hong Kong, is looking grim.It does, though, have a stable team, led by a CEO about to complete five years in the job. That puts the bank in a better place than traditional rival HSBC Holdings Plc, which is undergoing a radical overhaul with 35,000 job cuts under caretaker CEO Noel Quinn.On Thursday, StanChart posted full-year underlying pretax profit of $4.2 billion, slightly behind the consensus forecast of $4.3 billion, and announced a $500 million buyback. That was less than the $1 billion analysts had expected. The bank salved the disappointment by hinting that it will return more capital to shareholders after completing the sale of its stake in Indonesia’s PT Bank Permata. There’s no share buyback in the works at HSBC.Standard Chartered said that the coronavirus outbreak will delay its target of a 10% return on tangible equity by 2021. The epidemic has led to a shutdown of factories in China and wide-ranging travel disruption that has interrupted global trade. Its warning mirrors that from HSBC, which said last week that the outbreak could lead to as much as $600 million in additional loan losses if it continues into the second half of the year.Having Winters at the helm gives StanChart an edge — and not just over HSBC. Several other European banks have new or no heads. Earlier this month, Credit Suisse Group AG named a new CEO after ousting Tidjane Thiam over a spying scandal; UBS Group AG poached ING Groep NV Chief executive Ralph Hamers; Barclays Plc, according to the Financial Times, is looking for a replacement for Jes Staley, who’s preparing to retire from the bank next year amid allegations of links to sex offender Jeffrey Epstein.Winters hasn’t exactly had a chummy relationship with investors. He took a pay cut after shareholders complained about his high pension allowance last year, a revolt that he initially criticized as “immature and unhelpful.” To put that painful episode behind him, the CEO will need to offer a meaningful increase in shareholder returns from last year’s 6.4%, two percentage points lower than HSBC.Unfortunately, this is unlikely to be the year. As with HSBC, Hong Kong is StanChart’s single biggest market. Before the impact of last year’s anti-government protests could fade, the coronavirus has arrived to threaten the economy again. The outbreak will also hurt Singapore, another key market.All the same, if and when he leaves Winters will in all likelihood hand over a more solid franchise than he received. When he joined in June 2015, StanChart was neck deep in bad corporate loans in India and Indonesia. That problem is in the rearview mirror now. Even though the loan loss rate ticked slightly higher last year, it was just over half what it was two years ago. While asset quality pressures may rebuild because of the supply-chain disruption from the coronavirus, at least the bank’s ability to endure as an independent institution is no longer in doubt. Having made a mark as a digital lender in underbanked Africa, StanChart is now in the fray to open an online-only bank in Hong Kong. Given the aging demographics of its existing client base in the former British colony, going after more millennials and Generation Z customers may be a smart move.Asia is the biggest profit pool for banks worldwide. But growth is slowing and competition from fintech is on the rise. With global interest rates once again going limp, there’s little hope for boosting profit margins. While Winters can perhaps keep a tight leash on costs, he may not be able to pare them any further. Having pushed back the 10% return on equity target to beyond next year, even juicy buybacks won’t keep investors from souring on the one CEO who — to borrow from a StanChart advertising tagline — seems to be here for good. Or as close to that as it gets in European banking nowadays.To contact the authors of this story: Nisha Gopalan at firstname.lastname@example.orgAndy Mukherjee at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Britain will likely secure only temporary access to the European Union financial market under a broader trade deal in which finance may take a back seat to sectors such as fishing, financial industry officials said on Wednesday. Britain and the EU start talks next week on a trade deal that would come into effect next January after the "standstill" transition period that followed Brexit last month expires. Europe is Britain's biggest market for financial services exports, worth about 26 billion pounds annually, and access to the bloc would be under the EU's "equivalence" system.
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The Bank of England told banks on Wednesday to accelerate their efforts to ditch the use of Libor if they want to avoid facing more punitive terms when borrowing from the central bank. The BoE wants Libor, which banks were fined for trying to rig, replaced with the central bank's overnight "risk-free" Sonia interest rate. Hauser said that from October, the Bank will start increasing "haircuts" progressively on Libor-linked collateral used by banks to borrow from the central bank, meaning more collateral would be needed to cover the same amount borrowed.
Hong Kong's banks face at least two quarters of worsening asset quality and slowing loan growth as the coronavirus outbreak hits trade and consumer banking, analysts and bankers said. Lenders in the Asian financial hub, including HSBC and Standard Chartered , are seeing a drop in demand for mortgages, credit card usage and corporate loans, bankers with knowledge of the matter said. Hong Kong banks have Asia's largest exposure to China, which accounted for 29.4% of banking system assets in the first half of last year, credit ratings agency Fitch says.
Communities have been hit hard with 9,500 free-to-use cash machines removed from across the UK in last two years, according to Which?
British Cycling is beginning the search for a new sponsor after confirming on Tuesday that HSBC is pulling out only four years into an eight-year, multimillion pound deal. A source familiar with the matter told Reuters earlier on Tuesday that HSBC's deal will end after this year's Tokyo Olympics as the British seeks to cut costs. The news is a blow to British Cycling, one of the country's most well-funded sporting federations, which has produced multiple Olympic champions Jason and Laura Kenny, both of whom are in action at this week's Berlin track world championships.
(Bloomberg) -- HSBC Holdings Plc Chairman Mark Tucker’s drive to reboot the giant lender needs a reboot.The decision by UniCredit SpA’s Jean Pierre Mustier to drop out of consideration for HSBC’s top job marks the second high-profile setback in less than a week for Tucker, the first outsider ever hired as the chairman of the 165-year-old institution. The bank’s shares have tumbled 6.9% since a Feb. 18 strategy overhaul fell flat and on Monday reached their lowest in more than three years.Tucker is now conducting the search for a new CEO in the spotlight -- his first pick lasted just 18 months -- with shareholders demanding answers and some insiders questioning the board. Mustier’s exit further complicates an already drawn-out process and deepens the uncertainty around interim CEO Noel Quinn and the plan he announced last week to cut 35,000 jobs.“It’s not a good time to join the bank, especially for an external candidate,” Ronald Wan, CEO at Partners Capital International Ltd. in Hong Kong, said by phone. “HSBC is going through a challenging operating environment -- economic slowdown, the coronavirus outbreak, Brexit -- and the bank’s new strategy will all make the CEO’s job difficult.”Mustier, who led a turnaround at Milan-based UniCredit in the past four years, plans to stay and is committed to the new strategic plan announced in December, according to a UniCredit statement on Monday. The Frenchman informed Tucker of his decision to withdraw by phone on Sunday, a person with knowledge of the matter said.HSBC shares fell 2% in London on Monday, sliding to 550.80 pence, the lowest close since August 2016. The Mustier interlude highlights the churn at the top of European banking. UBS Group AG on Wednesday picked ING Groep NV CEO Ralph Hamers to take over from Sergio Ermotti. Rival Credit Suisse Group AG replaced Tidjane Thiam with Thomas Gottstein earlier this month, and Marco Morelli said he won’t seek another term as chief of Banca Monte dei Paschi di Siena SpA.A recent history of troubles at HSBC may make it even tougher to recruit an external candidate. For example, in the U.S., Wells Fargo & Co., another lender in need of a revamp, took six months to attract an outsider as CEO in the wake of scandals that claimed two chiefs in three years.If Tucker “doesn’t want to appoint Noel Quinn to the position on a permanent basis, then he needs to convince the market that he has some other credible options,” John Cronin, an analyst at the Dublin-based Goodbody stockbrokers, wrote in a note. “Or maybe he will just move to appoint Quinn without delay -- perhaps within the next two weeks. Our bet is on the latter.”Mustier had emerged as a key external contender for the role, pitting him against HSBC lifer Quinn. After being approached by HSBC, he engaged in informal talks before deciding that the timing wasn’t right to move because of UniCredit’s new strategic plan and brewing Coronavirus worries in Italy, according to a person close to his thinking. He informed UniCredit board members of the approach over the weekend before his call to Tucker.After John Flint’s surprise ouster in August, HSBC said that it could take six to twelve months to find a permanent successor.A CEO search extending into its seventh month and the appearance that Quinn would be a second choice had some clients and staff worried about the potential outcome, according to a person familiar with the matter.“The bank’s situation remains tough,” said Alex Wong, Hong-Kong based director of asset management at Ample Capital Ltd. “It’s not easy to ask another CEO to join you when they are already performing in their current position.”At UniCredit, Mustier has been cutting costs and accelerating the cleanup of the balance sheet, focusing on simplifying the bank’s structure and improving the way it allocates capital. Since 2014, UniCredit has cut about 20,000 jobs, 14,000 of which took place during Mustier’s tenure. He also oversaw a 13 billion-euro ($14.1 billion) rights offer in 2017 to help pay for a clean-up of bad loans. Under the new strategic plan he expects to cut 8,000 jobs in total.That track record would have been appealing at HSBC, which is going through the third strategic overhaul in a decade. Tucker, who ejected Flint last year after he failed to revive growth at the Asia-focused lender, has struggled to explain why a bank with such a stronghold in some of the world’s fastest-growing economies has been unable to produce a better return.(Adds closing HSBC stock price)\--With assistance from Alfred Liu.To contact the reporters on this story: Harry Wilson in London at email@example.com;Sonia Sirletti in Milan at firstname.lastname@example.orgTo contact the editors responsible for this story: Ambereen Choudhury at email@example.com, James Hertling, Keith CampbellFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- European banks have a problem with their boardrooms.From the Anglo-Asian giant HSBC Holdings Plc to Spain’s Banco Santander SA and Switzerland’s Credit Suisse Group AG, a troubling phenomenon has become apparent at many of the region’s lenders: the weakness of the body tasked with ensuring the company’s success.Bankers are already under pressure because of rock-bottom interest rates and digital disruption, so it’s far from ideal that their boards appear slow, clumsy and overly beholden to their chief executives. Proper corporate governance matters as much now as it did during the financial crisis. While lenders may be simpler and safer by some measures, they’re still impenetrable to the outside world, and new risks are always emerging. Their CEOs need to be chosen, managed and held in check more effectively.An endless series of boardroom dramas has beset Europe’s banks in the past year. Consider HSBC. the continent’s biggest lender has just embarked on its biggest overhaul in decades (its third attempt to adapt to the post-crisis era), a plan that involves tens of thousands of job cuts, scrapping buybacks and reallocating capital to more profitable businesses. It’s hardly the time to be leaderless.Yet six months after ousting CEO John Flint, who only held the job for a year and a half, HSBC’s board hasn’t made up its mind whether it wants to give his interim replacement Noel Quinn the job, or to hire externally.In fairness, finding the right boss for a sprawling bank with a $2.7 trillion balance sheet is the most important task of the board and Chairman Mark Tucker — alongside setting the strategy. It mustn’t be rushed. But a strategic overhaul of this magnitude needs a leader who owns the new plan. The longer the appointment drags out, the tougher it will be for Quinn to execute; and the harder it would be for a credible external candidate to implement someone else’s turnaround story. The board has given itself until as late as August, but time isn’t on its side after the favorite outside candidate, UniCredit SpA’s Jean Pierre Mustier, committed himself to his current employer.HSBC’s board is in fine company when it comes to messy situations. At Barclays Plc, another regulatory probe into CEO Jes Staley — this time looking at his relationship with the disgraced financier Jeffrey Epstein — raises questions about oversight at the top of the firm. Staley was fined previously for attempting to unmask a Barclays whistleblower. The London-based bank took two months to go public on the latest inquiry, and it hasn’t shared details of its own review into the CEO’s relationship with Epstein. While one shouldn’t jump to conclusions, more transparency from the board would have been invaluable to investors.Elsewhere, the Credit Suisse board hardly covered itself in glory during a months-long spying scandal that cost CEO Tidjane Thiam his job. While Thiam was cleared of knowing about the surveillance operations against employees, past and present, it’s pretty damning that neither he nor the board were aware of those activities being carried out by key personnel. The Swiss giant’s directors must share responsibility for an episode that damaged the bank’s reputation and upset employees.In April, Santander faces its own embarrassing showdown in a Spanish court. After withdrawing its offer of the CEO post to Andrea Orcel — the former head of investment banking at UBS Group AG — over a disagreement on pay, Santander is being sued by Orcel for more than 100 million euros ($108 million). Why Santander would have agreed to honor UBS’s generous financial obligations to Orcel, and then withdrew the proposal, is unclear. A detailed account of alleged text messages between Santander Chairman Ana Botin and Orcel and his wife, published by Reuters, points to personal relationships possibly playing a bigger role than they should have in a CEO appointment.For its part, UBS botched its own internal CEO succession plan, and eventually hired Ralph Hamers from ING Groep NV — despite the Dutch bank’s failings over money-laundering and Hamers’s lack of experience in UBS’s core businesses. That was a controversial move by the directors of the world’s biggest wealth manager. In the age of the “purposeful company,” bank boards should be leading the way on properly representing their shareholders, as well as employees and society. It isn’t obvious whose interest they’ll serve by remaining so ineffective. To contact the author of this story: Elisa Martinuzzi at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- A raft of new coronavirus cases in numerous countries outside China over the weekend has ignited fresh concern about the ability of the illness to spread and its potential economic impact.European shares plunged 3.7% as of 11:12 a.m. in London after Italy’s government imposed a lockdown on an area of 50,000 people near Milan and took other measures as infections there exceeded 130. South Korea’s Kospi tumbled 3.9% after the number of cases in the country surged and the government raised its infectious-disease alert to the highest level. Iran reported an eighth death.That’s all on top of the impact in China, where millions of firms face potential collapse if banks don’t act. After meeting on Friday, the nation’s leaders said they will exercise more flexibility in monetary and fiscal policy.Read more: New Cases in Gulf, Italy Boost Fears of PandemicHere’s what market players are saying about the latest developments:Hello TINA“The key risk you’re facing is that this coronavirus now via a lot of these unwanted disruptions will actually lead to negative earnings growth and that will potentially scare investors considering where valuations are,” Christian Mueller-Glissman, managing director of asset allocation at Goldman Sachs Group Inc., said in an interview with Bloomberg TV. “Lower yields obviously make you want to own even more risky assets -- like we always call it TINA, there is no alternative -- so you have people being forced to own something in equities. Secular growth stocks are trading at one of the highest valuation premia in history. The problem is some of those are also exposed to these supply-chain disruptions, think about the big FAANG names. As a result of that we think that this in the near-term will potentially create volatility in them as well. So there’s nothing really completely safe.”A Shallow V“It is difficult to evaluate the impact thus far. High frequency data show very little to no pick-up in activity so far. There may be a risk that a V-shaped recovery of Chinese growth turns out to be shallower than many currently assume,” HSBC Bank Plc strategists led by Max Kettner wrote in a note. “Stick to underweight in equities but close underweight in HY; remain overweight in IG credit and government bonds. Equities seem to have escaped ‘the bad news is bad’ paradigm. Other cyclical assets such as FX or commodities have priced growth risks more appropriately. Equities have also outperformed quite substantially vs HY lately and the global ERP has shrunk. We therefore prefer adding to HY than to equities. We remain cautious on EM asset classes and overweight gold and government bonds.”Normal by July“More near-term panic will weigh on risk, but panic is necessary to increase containment odds. Credit markets appear to recognize that,” said Dennis DeBusschere of Evercore ISI. “EISI’s Survey team asked investors about the impact of the outbreak and the vast majority of respondents see both the risks as understated and expect U.S. Treasury yields were likely to decline by 25 basis points (to about 1.3%). 80% of investors expect supply chains to return to near-normal by July though.” (The survey was published on Feb. 17.)Hard to Pick Bottom“With cases of COVID-19 still rising, it is hard to tell when manufacturing will bottom, potentially setting the stage for prolonged weakness,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “This means that we’re going to see the juxtaposition of more safe-haven demand.” Gold Rally“U.S. real rates have plummeted during the virus scare, with 10y TIPS yields -- already quite low at just 6.5 basis points above zero on January 17 -- are today more than 15 basis points below zero,” and John Velis, FX and macro strategist at BNY Mellon. “Since gold tends to trade inversely to real rates, the rally in gold will probably persist as long as the latter stay under pressure.”‘Intense’ Hunt for Yield“We have been advocating a more balanced position between bonds and equities in recent weeks since we have little clarity on how the outbreak would evolve. It seems like that the number of new cases in China is coming down, with the daily number of recovered patients higher than the new confirmed cases. This may encourage the Chinese authorities to permit more workers to return to work and limit disruption to production,” said Tai Hui, chief market strategist for Asia at JPMorgan Asset Management. “The decline in bond yields also meant investors’ search for yield will remain intense. This underpins our constructive view on EM fixed income and developed market corporate debt.”Risk Aversion“Risk aversion is likely to intensify over the near term given the sharp rise in cases in Korea, Italy and elsewhere,” said Mitul Kotecha, senior emerging markets strategist at TD Securities in Singapore. “Markets are becoming increasingly focused on the risk of more prolonged economic damage than had been previously expected. Supply chains are becoming increasingly exposed, while services and tourism are suffering across many countries.”China Weakness“Policymakers are trying to get the economy going again but we think weakness is likely to persist well into the fourth quarter,” said Win Thin, global head of currency strategy at Brown Brothers Harriman, of China. “Stimulus is in the pipeline but it won’t be enough to totally offset the growing impact of the virus.”Asymmetric Dollar Strength“U.S. dollar strength will likely be asymmetric,” said Citigroup Global Markets Asia-Pacific chief economist Johanna Chua. “Given the low cost of capital globally and comforting commitments from authorities to render further support, high yielding emerging-market FX (Indian rupee, Philippine peso) may not hurt as much and is likely to outperform the low yielding EM FX especially in Asia, where the Singapore dollar, Thai baht, Korean won etc. are also the most impacted on economic activity -- and hurt on their current accounts. In spite of being a high yield FX, the Indonesian rupiah may have some more unwind of stretched long positioning before settling down.”Headline Risk“We view this as headline risk. Our base case view is that coronavirus continues to represent demand delayed and not demand destroyed,” said Steve Chiavarone, a portfolio manager with Federated Investors.(Updates with fresh comments from Goldman Sachs and HSBC.)\--With assistance from Vildana Hajric, Adam Haigh, Lilian Karunungan, Ruth Carson, Francine Lacqua, Cecile Gutscher, April Ma and Amanda Wang.To contact the reporters on this story: Joanna Ossinger in Singapore at firstname.lastname@example.org;Anchalee Worrachate in London at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Sam Potter, Cecile GutscherFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
As the coronavirus spreads beyond China, world markets are being forced to rethink the economic impact of the outbreak and how quickly it can be contained. New infections have ebbed in China, as many investors had assumed, but rose in South Korea, Italy and Iran, leading to lockdowns and travel restrictions in all three countries. South Korea’s Kospi was worst hit first thing Monday, dropping almost 4%, as the country’s fourth-largest city Daegu grew increasingly isolated when the number of infections there increased rapidly.
LONDON/MILAN (Reuters) - UniCredit Chief Executive Jean Pierre Mustier has ruled himself out of a switch to European rival HSBC , a source with knowledge of the matter told Reuters on Sunday. Italy's biggest bank is set to announce he will remain part of the lender's plans, ending speculation Mustier was set to take the helm at HSBC after he emerged as a contender last week. UniCredit declined to comment.
Italy's biggest bank UniCredit may make an announcement as early as Friday night on the future of boss Jean Pierre Mustier, two sources familiar with the matter said, after reports he is vying for the top job at rival HSBC. Shares in UniCredit fell 3.9% on Friday, against a 2.3% drop in Italy's banking index, hit by reports of Mustier's possible departure. A third source familiar with the matter had said earlier on Friday Mustier was a candidate to succeed HSBC interim CEO Noel Quinn who earlier this week unveiled a major overhaul at the bank, its third since the financial crisis.
Shares in Italy's biggest bank UniCredit fell more than 1% at open on Friday following reports Chief Executive Jean Pierre Mustier is being considered for the top job at rival HSBC. HSBC this week unveiled a drastic overhaul, the third since the financial crisis, under interim CEO Noel Quinn. Bloomberg News reported on Thursday Mustier had emerged as a contender for the job, which Quinn is vying to secure on a permanent basis.
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