Tag: HSBC

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HSBC Reports Strong Q1 2025 Results Amid Economic Uncertainty with a 317% increase in pre-tax profit

HSBC

HSBC, Europe’s largest lender, has posted better-than-expected results for the first quarter of 2025, demonstrating resilience despite global economic challenges.

The bank reported a pre-tax profit of $9.48 billion, surpassing analyst estimates of $7.83 billion. Revenue for the quarter stood at $17.65 billion, reflecting a 15% decline compared to the previous year.

HSBC’s pre-tax profit for Q1 2025 was $9.48 billion, which represents a 25% decline compared to the same quarter last year when it reported $12.65 billion.

However, compared to the previous quarter, pre-tax profit surged by nearly 317%.

A key highlight of HSBC’s earnings announcement was its $3 billion share buyback program, which the bank intends to complete before its interim results later this year.

This move signals confidence in its financial position and commitment to returning value to shareholders.

Despite the strong performance, HSBC warned of heightened macroeconomic uncertainty, citing protectionist trade policies as a factor negatively impacting consumer and business sentiment.

However, the bank remains optimistic about its restructuring efforts, which are expected to drive cost savings and operational efficiency.

HSBC’s wealth business and corporate banking segments were standout performers, contributing significantly to its earnings growth.

CEO Georges Elhedery emphasised the bank’s strategic discipline and ability to navigate market volatility.

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Not so FINE at HSBC – £57.4m fine for depositor protection system failings

Bank system failings.

HSBC fined £57.4m by the Bank of England for ‘serious failings’ to protect customer deposits.

The bank failed to accurately identify deposits eligible for the UK’s Financial Services Compensation Scheme, the Bank’s Prudential Regulation Authority (PRA) announced.

HSBC was fined by the Bank of England’s Prudential Regulation Authority (PRA) for failing to properly implement the depositor protection rules, which are meant to safeguard customer deposits in case of a bank collapse. 

Serious concerns

The PRA said the failings were ‘serious‘ and ‘materially undermined the firm’s readiness for resolution’. HSBC reportedly said it was pleased to have resolved the ‘historic matter’ and cooperated with the investigation. The ‘failings’ occurred between 2015 and 2022. The fine is the second highest to date imposed by the regulator.

Protected up to £85,000 per person per institution

Under the scheme, customer deposits are protected up to the value of £85,000.

Under depositor protection rules, banks must have systems and controls in place to make sure that financial information is logged correctly. This information is needed if the FSCS has to make payments to customers upon a bank collapse.

However, the PRA said HSBC Bank incorrectly marked 99% of its eligible beneficiary deposits as ‘ineligible’ for FSCS protection.

Unfortunately this episode doesn’t give me much faith in the banking system that is supposed to protect the ‘saver’. At least the PRA discovered the failings.

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UK mortgage rates fall in January 2024

Mortgage rates down

Mortgage lenders have started 2024 by cutting interest rates.

The UK’s biggest lender, the Halifax, has cut some interest rates by nearly a full 1%, with other lenders expected to follow suit. HSBC has announced it will also make cuts in January.

Halifax is reducing its rates, with interest on a two-year fixed deal being cut by up to 0.83%. HSBC is due to reduce rates on its two-year fixed rate for remortgages (for someone with at least 40% equity in their home) falling below 4.5% for the first time since early June last year.

Mortgage rate chart October 2021 – January 2024

The Bank of England’s (BoE) benchmark interest rate has been held three times at 5.25%, analysts now expect the next move to be down.

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HSBC down online banking outages

Bank online outage

It is widely reported that HSBC‘s online banking system is experiencing some problems today, 24th November 2023. 

According to the news reports, many customers are unable to access the app or the website or make payments. 

The bank has acknowledged the issue and said it is working hard to fix it as soon as possible. Some users have also reported missing money from their accounts.

Downdetector, which tracks websites, showed more than 4000 people reported they could not access HSBC services.

‘It is impacting HSBC UK customers only – there is no impact to First Direct or M&S Bank customers’, a spokesperson for the bank said.