Hsbc Share Price Dropping Like A Stone

[FANTASY CHARGES]

 

$8.6 BILLION WRITE OFF ON AMERICAN DEBT !!

 

 

or was it you lot claiming those bank charges ????

 

 

[FANTASY CHARGES]

US bad debts may worsen, says HSBC | Business | Money | Telegraph

 

 

US bad debts may worsen, says HSBC

 

 

By Philip Aldrick, Banking Correspondent

 

Last Updated: 1:25pm GMT 05/03/2007

 

 

 

 

 

US bad debt comes home to haunt HSBC

US mortgage crisis goes into meltdown

Fund guru blasts HSBC's new head HSBC has indicated that its US problems could worsen after bad debts soared to $10.6bn (£5.5bn) last year due to mismanagement of its US mortgage portfolio.

HSBC has already taken drastic steps to clean up its US operation

 

Reporting a 5pc increase in full year pre-tax profits to $22.1bn despite the problems, HSBC executive chairman Stephen Green said: "Going forward, the level of future impairment allowances will be sensitive to economic conditions and, in particular, to the state of the housing market, the level of interest rates and the availability of financing options for sub-prime borrowers."

HSBC took a surprise extra $1.76bn bad debt charge in the US last month after risky sub-prime loans went bad following a 10pc housing market collapse.

The provision caused the bank to issue its first profit warning in 142 years. North America accounted for $6.8bn of the total impairment charge, up from $4.9bn, and profits in the US personal businesses tumbled by $725m, the results today showed.

Mr Green said: "We are restructuring this business to avoid any repetition of the risk that built up over the past two years." Senior US executives have been removed and a new management team parachuted into the affected business by head office.

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Mr Green described the bank's solid performance in spite its US troubles a "testament to HSBC's strength and diversity". In 2006, pre-tax profits from Asia, the Middle East, Latin America and other emerging markets approached 50pc of the total.

He added: "We intend the contribution from these markets to trend upwards over the next five years. These economies are growing faster than developed markets and, therefore, we will concentrate investment primarily in these markets in the form of both organic development and acquisition.

"In mature markets, we will focus particularly on serving customers with international financial needs, including the diaspora from emerging markets. Insurance and retirement services will be a growing part of our business."

In the UK, bad debt charges in retail banking as a percentage of lending remained broadly in line with last year. However, gross bad debt impairment for the European region, which is dominated by the UK, rose 12pc to £2.16bn after a rapid increase in provisions in the second half.

The UK corporation tax charge fell from $692m to $650m, or 12pc of the total $5.22bn tax paid by the bank.

Mr Green said the outlook was good. "Although growth expectations in the US are moderating, the economic outlook elsewhere remains encouraging as globalisation expands market access and emerging markets grow stronger, forcing competitive restructuring."

Net interest income was 10pc better at $34.5bn and the dividend was increased 11pc to 81c, although the costs as a proportion of income worsened from 51.2pc to 51.3pc.

The figures were marginally ahead of analysts' forecasts but Dresdner Kleinwort's James Eden said: "Don't expect today's results to have any transformational impact on sentiment. The issues remain the same, and the US sub-prime sector faces an uncertain outlook."

He expects North American bad debts to worsen 23pc by 2009. He added: "While [new accounting standards] make it harder to kitchen-sink, we believe HSBC went as far as possible to inflate the 2006 bad debt charge."

The shares rose 14 to 900p, in the face of a near 100 point fall in the FTSE 100, making up the ground lost in the days ahead of the results.

[HSBCrusher]

I'm reaching for my box of tissues.

[nettyg]

crusher.. you crying or you been at the laughing powder again...!?!?!?! lol

does make your heart bleed doesn't it... erm... NO haha

[FANTASY CHARGES]

Fixing US mortgages a long job for HSBC | Business | Money | Telegraph

Fixing US mortgages a long job for HSBC

By Philip Aldrick, Banking Correspondent

Last Updated: 2:19am GMT 06/03/2007

Comment: HSBC may not be shot of the poison bottle 'We will always offer a free account in the UK'

HSBC has admitted that it will take three years to fix its US mortgage business, which led to its first ever profits warning last month.

The banking giant added that further bad debt provisions are likely despite the $10.6bn (£5.5bn) it set aside in the full year results yesterday to cover non-performing loans in its US housing arm.

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HSBC has been hit by risky "second tier" lending in the sub-prime market, which leave it down the pecking order on claims. In many cases, all of the capital lent out has had to be written off due to a 10pc collapse in the US housing market.

Chief executive Mike Geoghegan stressed that "the team and I are fully focused on this matter". But he added: "We can't do it overnight. It will probably take two or three years to work this out."

Some $13.7bn of loans in the affected US mortgage services division, which is now being wound up, are forecast to default when they reach their first interest rate reset this year or next. The bank has so far written off just $2.17bn of loans in the division.

Mr Geoghegan warned: "We can't take provisions now for those loans that aren't delinquent and are showing no signs of impairment However, if people are unable to refinance, then further provisions will arise."

James Eden, an analyst at Dresdner Kleinwort, expects North American bad debts to increase 23pc by 2009. He added: "While [new accounting standards] make it harder to kitchen-sink, we believe HSBC went as far as possible to inflate the 2006 bad debt charge."

Others are concerned that the troubles spreading through the sub-prime market will soon spill over into prime mortgages and unsecured lending in the US.

In the US, new management has been introduced and the retail and investment banks are being "pulled together". The mortgage services business is being transferred to the investment bank where loans will be securitised and sold into the debt markets.

Stephen Green, the HSBC chairman, dismissed suggestions that he took his eye off the ball in failing to integrate the businesses when he was chief executive. He said: "There was no governance issue. We have always had a policy of not micro-managing the business. I don't think I was asleep on the job."

Mr Green's pay and bonus increased 16pc to £2.93m despite producing shareholder returns that significantly underperformed that of HSBC's peers.

Amicus, the union, said: "Staff will be sickened to hear that while their bosses are to receive another inflated pay package, they have to accept another below inflation pay rise."

Mr Geoghegan's pay increased from £671,000 to £2.87m after he was promoted.

Despite the US problems, HSBC produced record profits of $22.1bn for the year, a rise of 5pc. Almost half the profits came from Asia, the Middle East, Latin America and other emerging markets, where HSBC said it would focus investment.

HSBC said its future will be in "joining up the world" by providing cross border products. It already provides bank accounts to Poles living in the UK that can be set up overseas.

Net operating income was up 10pc to $54.8bn and the dividend was increased 11pc to 81c. A final dividend of 36c is payable on May 10. The shares rose 10p to close at 896p.

 

 

 

[FANTASY CHARGES]

HSBC - Review - The World's Worst Employer? (HFC Beneficial Finance)

[Glenn UK]

i reckon it wont be long before it will be worthwhile buying shares in banks, you never know they may end up as penny shares if we are lcuky

[FANTASY CHARGES]

Fixing US mortgages a long job for HSBC | Business | Money | Telegraph

Fixing US mortgages a long job for HSBC

 

By Philip Aldrick, Banking Correspondent

Last Updated: 2:19am GMT 06/03/2007

Comment: HSBC may not be shot of the poison bottle 'We will always offer a free account in the UK'

HSBC has admitted that it will take three years to fix its US mortgage business, which led to its first ever profits warning last month.

The banking giant added that further bad debt provisions are likely despite the $10.6bn (£5.5bn) it set aside in the full year results yesterday to cover non-performing loans in its US housing arm.

advertisement

HSBC has been hit by risky "second tier" lending in the sub-prime market, which leave it down the pecking order on claims. In many cases, all of the capital lent out has had to be written off due to a 10pc collapse in the US housing market.

Chief executive Mike Geoghegan stressed that "the team and I are fully focused on this matter". But he added: "We can't do it overnight. It will probably take two or three years to work this out."

Some $13.7bn of loans in the affected US mortgage services division, which is now being wound up, are forecast to default when they reach their first interest rate reset this year or next. The bank has so far written off just $2.17bn of loans in the division.

Mr Geoghegan warned: "We can't take provisions now for those loans that aren't delinquent and are showing no signs of impairment However, if people are unable to refinance, then further provisions will arise."

James Eden, an analyst at Dresdner Kleinwort, expects North American bad debts to increase 23pc by 2009. He added: "While [new accounting standards] make it harder to kitchen-sink, we believe HSBC went as far as possible to inflate the 2006 bad debt charge."

Others are concerned that the troubles spreading through the sub-prime market will soon spill over into prime mortgages and unsecured lending in the US.

In the US, new management has been introduced and the retail and investment banks are being "pulled together". The mortgage services business is being transferred to the investment bank where loans will be securitised and sold into the debt markets.

Stephen Green, the HSBC chairman, dismissed suggestions that he took his eye off the ball in failing to integrate the businesses when he was chief executive. He said: "There was no governance issue. We have always had a policy of not micro-managing the business. I don't think I was asleep on the job."

Mr Green's pay and bonus increased 16pc to £2.93m despite producing shareholder returns that significantly underperformed that of HSBC's peers.

Amicus, the union, said: "Staff will be sickened to hear that while their bosses are to receive another inflated pay package, they have to accept another below inflation pay rise."

Mr Geoghegan's pay increased from £671,000 to £2.87m after he was promoted.

Despite the US problems, HSBC produced record profits of $22.1bn for the year, a rise of 5pc. Almost half the profits came from Asia, the Middle East, Latin America and other emerging markets, where HSBC said it would focus investment.

HSBC said its future will be in "joining up the world" by providing cross border products. It already provides bank accounts to Poles living in the UK that can be set up overseas.

Net operating income was up 10pc to $54.8bn and the dividend was increased 11pc to 81c. A final dividend of 36c is payable on May 10. The shares rose 10p to close at 896p.

 

 

 

 

 

 

interesting to see what FC reported 5 months ago

 

remember when asking an accountant what is one and one ?

 

answer "what do you want it to equal?"y

[Castlebest]

what does 1+1 equal is a good question and yes the accountants can make it anything they want.... unfortunatly they cant prove it you need a quantity surveyor to do that

 

in walks castelbest guns loaded

 

 

pete