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DealBook: HSBC’s Profit Fell 17% in 2012 on Money Laundering Fine

March 4, 2013 by Leave a Comment

A branch of HSBC in London. Britain's tax authority is investigating more than 4,000 accounts in the British crown dependency of Jersey.Andy Rain/European Pressphoto AgencyA branch of HSBC in London. Britain’s tax authority is investigating more than 4,000 accounts in the British crown dependency of Jersey.

LONDON – HSBC, Britain’s biggest bank, said on Monday that net profit fell 17 percent last year because of a record fine to settle money laundering charges and changes related to the value of its own debt.

Profit fell to $13.5 billion from $16.2 billion in 2011, failing to meet analysts’ expectations. The bank also missed its own target of return on equity of 12 to 15 percent. Its shares fell 2.6 percent in early trading in London on Monday.

Douglas J. Flint, HSBC’s chairman, said in a statement that last year was “a difficult one for all at HSBC as we addressed the restructuring of the firm against a lower-growth economic backdrop and with legacy issues and regulatory challenges imposing a further set of imperatives.”

The bank’s chief executive, Stuart T. Gulliver, added that he expected the market environment to remain “difficult,” but that HSBC would benefit from growth of the economies in China and the United States even if European markets continued to struggle.

To fulfill his pledge to increase profitability, Mr. Gulliver took the bank out of some markets, sold business divisions and eliminated jobs. HSBC has closed or sold 46 businesses and investments since 2011, including four this year. The bank sold its stake in Ping An Insurance of China for $9.4 billion and offloaded its credit card unit in the United States to Capital One Financial for $2.6 billion. HSBC also sold its unit in Panama to Bancolombia for $2.1 billion last month.

In December, HSBC agreed to a record $1.92 billion fine to settle charges with American authorities that the bank breached rules against money laundering, including that it handled money transfers worth billions of dollars for countries under United States sanctions.

HSBC, based in London, generates more than half of its profit in Asia. Growth in China has helped the bank compensate for shrinking or slower-growing income in Europe since the beginning of the financial crisis. Europe was the only region where HSBC’s earnings declined last year.

The bank said it had made solid progress on gradually reducing the size of its consumer lending and mortgage portfolio in the United States. HSBC’s fastest-growing business last year was its retail banking and wealth management operation.

HSBC added that it planned to increase the first three interim dividends this year by 11 percent.

Article source: http://dealbook.nytimes.com/2013/03/04/hsbc-annual-profit-falls-on-money-laundering-charges/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: Chief Risk Officer Departs in UBS Shake-Up

December 2, 2011 by Leave a Comment

Philip J. Lofts is returning to his old position as chief risk officer for UBS.Martin Ruetschi/European Pressphoto AgencyPhilip J. Lofts is returning to his old position as chief risk officer for UBS.

7:53 p.m. | Updated

LONDON — UBS said on Thursday that its chief risk officer had departed after less than a year in the job.

Maureen Miskovic, who joined UBS in January as head of risk, was succeeded by her predecessor, Philip J. Lofts, the bank said in a statement. Robert J. McCann, head of wealth management for the Americas, succeeded Mr. Lofts as head of the Americas.

UBS also named Ulrich Körner as chief executive of Europe, the Middle East and Africa, a position previously held by Sergio P. Ermotti before he was named chief executive of the bank last month. Mr. Körner, who joined UBS from Credit Suisse in 2009, also remains chief operating officer of the bank.

The management changes come two weeks after Mr. Ermotti was named the permanent chief executive at UBS. He assumed the job on an interim basis in September when Oswald J. Grübel resigned after a trading scandal this year involving a former trader cost the bank $2.3 billion.

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A spokesman for UBS denied that the trading loss had led to the departure of Ms. Miskovic, a former risk officer at State Street bank and Lehman Brothers Holdings in the United States.

During his time as head of risk, Mr. Lofts “demonstrated that he has the broad skills and experience and the strong leadership needed to run our risk organization decisively in a turbulent market environment.”

Mr. Ermotti told investors last month that he planned to increase return on equity, a measure of profitability, by reducing weaker business units and focusing on the more successful wealth management operation. He also pledged to restore the bank’s reputation, which was damaged after the bank discovered the large trading loss.

Kweku M. Adoboli, the former trader who has been charged with fraud and false accounting for the trades, has yet to enter a plea and faces a court hearing in London this month.

Article source: http://dealbook.nytimes.com/2011/12/01/ubs-chief-risk-officer-steps-down/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: Glencore I.P.O. Approved in Hong Kong; Prada Applies

April 1, 2011 by Leave a Comment

Despite the recent turbulence in financial markets, plans for two high-profile stock market listings are moving forward in Hong Kong.

Glencore International, a commodities trader based in Switzerland, received approval from the Hong Kong Stock Exchange on Friday for an initial public offering, according to a person with direct knowledge of the situation. Glencore is planning to raise funds in a dual listing in London and Hong Kong, said the person, who spoke on condition of anonymity because he was not authorized to speak publicly about the plans.

Separately, plans for a stock market listing in Hong Kong by Prada, the Italian fashion house, took a step forward this week with the submission of a listing application to the city’s stock exchange. The move puts Prada on track for a market debut around the middle of this year.

Prada had said in January that it intended to carry out an initial public offering in Hong Kong, and the formal application this week signaled that it was confident that the market environment was stable enough — despite the turmoil that has erupted in the Middle East since then and the lingering nuclear crisis in Japan — to press ahead with its plans.

A person with direct knowledge of the matter said Friday that Prada’s application had been submitted on Wednesday, setting in motion a process that could lead to a price range for the shares being determined in June, and a trading start in July. The person declined to be identified because he was not authorized to speak publicly about the matter.

The listing could raise as much as $2 billion, some analysts believe. Prada, which is based in Milan but derives a large part of its sales from Asia, is one of a growing number of non-Asian companies that are choosing to list on Asian stock exchanges.

Half a dozen such I.P.O.’s took place in Hong Kong — the main beneficiary of this trend — last year. Bankers in the city say that as many as a dozen could follow this year, including mining companies from Russia, Kazakhstan and Mongolia.

Fitness First, a British gym operator owned by the private equity firm BC Partners, is seeking a market debut in Singapore. Samsonite, maker of upscale suitcases and bags, is considering a listing in Asia, most likely in Hong Kong.

Glencore has not made any formal announcements on its I.P.O. plans but people with knowledge of the matter have said the dual listing could raise as much as $10 billion.

Asian stock exchanges now attract the majority of global I.P.O.’s. Data published by Thomson Reuters on Friday showed that exchanges in the Asia-Pacific region, excluding Japan, accounted for 54 percent of global I.P.O. proceeds during the first quarter of this year.

Article source: http://feeds.nytimes.com/click.phdo?i=e541702254071de95f3ce76deda1c0f4

Filed Under: Business News Tagged With: , ,