INSUBCONTINENT EXCLUSIVE:
The bank is the worst performer on the benchmark Hang Seng index so far this year.HSBC Holdings Plc slumped below its financial crisis low
set more than a decade ago as pressures mount on several fronts, including a potential threat to its China expansion plans and increased
scrutiny of money laundering controls.The London-based bank's Hong Kong shares on Monday slid below their closing low for March 2009,
hitting as low as HK$29.60
They have plunged 51 per cent this year, reaching the lowest since 1995
In London, HSBC fell 3.3 per cent as of 8:05 a.m
local time, compared with the 1.7 per cent decline in the benchmark FTSE 100 Index.Europe's largest bank is a possible candidate for China's
"unreliable entity list" that aims to punish firms, organizations or individuals that damage national security, the Communist Party's Global
Times newspaper reported Saturday
A day later, HSBC was among global banks named in a report by the International Consortium of Investigative Journalists on lenders that
"kept profiting from powerful and dangerous players" in the past two decades even after the U.S
imposed penalties on the institutions."If the company is listed as a unreliable company by China, which looks certain since it's a Global
Times article, the bank will be facing lots of difficulties to do business in China," Banny Lam, head of research at CEB International
Investment Corp., said by phone Monday
"They may have trouble expanding the mainland business, after investing so much there over the past few years."The bank has rankled China
over its participation in the American investigation of Huawei Technologies Co
Penalties include restrictions on trade, investments and visas on companies, countries, groups or persons that appear on the list.HSBC
declined to comment on the Global Times article
In a statement Monday in response to the ICIJ report it said that "starting in 2012, HSBC embarked on a multi-year journey to overhaul its
ability to combat financial crime across more than 60 jurisdictions
HSBC is a much safer institution than it was in 2012."Standard Chartered Plc, which was also mentioned in the ICIJ report, declined as much
as 5.9 per cent in Hong Kong and 5.1 per cent in London
"We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programs," the
bank said Monday in a statement.HSBC now risks being caught in deepening turmoil after a swirl of trouble over the past year amid political
unrest and an economic slump in its biggest market, Hong Kong
It also faces difficulties in navigating low interest rates and surging loan losses sparked by the global pandemic.HSBC Chief Executive
Officer Noel Quinn, who took over as the bank's permanent head in March, last month issued a stark warning about tough times ahead while
reporting that first-half profit halved and predicting loan losses could swell to $13 billion this year
Mr Quinn said the bank would attempt to hasten a shakeup of its global operations, accelerating a further pivot into Asia as its European
operations lose money.Struggling to boost returns, the lender has come under fire both in the West and in China as it attempts to steer
through political tension
HSBC was lambasted in the U.S
over its support for China's new security legislation on Hong Kong.A jump in income from its markets business has failed to make up for
broader shortcomings, unlike at some Wall Street and European competitors
HSBC stock has fallen more steeply than most big rivals this year, with Citigroup Inc
posting declines of 44 per cent and 29 per cent, respectively.To make matters worse, HSBC sparked anger in Hong Kong earlier this year,
alienating some of its most loyal investors, after scrapping its dividend in response to the pandemic
The bank is the worst performer on the benchmark Hang Seng index so far this year.(Except for the headline, this story has not been edited
by TheIndianSubcontinent staff and is published from a syndicated feed.)
