The Good, the Bad and the Ugly at HSBC
HSBC’s aggressive cost-cutting plan is bearing fruit, at least from a net income perspective. Revenues are down though, and the British bank’s latest scandal just got a lot more costly.
The bank posted a 23% increase in first-half profit, boosted by the more than 46,000 job cuts made since 2011, including 1,100 during the first half of the year. But HSBC revenue fell 7% as the bank sold off businesses and narrowed its global footprint. The British bank also acknowledged that it may need to pay $1.6 billion to U.S. regulators for allegedly selling soured residential mortgage-backed securities, up from a previous estimate of $900 million. HSBC shares were down nearly 5% on Monday.
From an employee perspective, there a few pieces of good news available. Due to the bank’s recent history of scandal, HSBC added 1,600 employees to its compliance and regulatory units. In addition, HSBC chairman Douglas Flint suggested that the bank will increase base salaries to help circumvent impending bonus caps, which he said could have a "highly damaging impact on our competitive position".
And finally, the bank’s capital ratios are in good standing, giving less reason for HSBC to make more job cuts than originally planned. So there’s a little bit of everything at HSBC.
Diary of an Intern (eFinancialCareers)
“It has become clear that it’s extremely important to be flexible and agile, both in terms of aptitude and lifestyle, to cope with working in a bank,” said our investment banking intern mole.
MetLife’s new asset-management unit is off to a good start. The insurance firm just won a $5 billion commitment from SunTrust Banks for commercial mortgage loans. The group appears poised for growth.
Rough Six Months (Financial News)
How bad has 2013 been for commodity traders? The world’s 10 largest investment banks saw a 25% dip in their commodities revenues in the first half of the year.
More than Three Horses (Bloomberg)
Additional names are being considered in the race to replace Ben Bernanke as Fed Chairman, according to Federal Reserve Bank of Dallas President Richard Fisher. Many had assumed the decision was down to former Fed Vice Chairman Donald Kohn, President Obama’s former adviser Lawrence Summers, and Janet Yellen, the Fed’s current vice chairman.
Catch Me If You Canish (Bloomberg)
A man named KK Ho did everything an RBS bond salesman was supposed to do, including meeting with clients and senior management. The only problem is he wasn’t a bond salesman, just a former employee looking to catch on. This story is crazy.
The Gloves are Really Off Now (NY Post)
How bloody is the fight getting between hedge fund titans Bill Ackman and George Soros? Ackman reportedly filed a complaint with the SEC on Friday alleging Ackman and others broke insider trading laws in their short squeeze against Herbalife.
Private equity firm GP Investments, whose shares have fallen 78% in the past five years, nearly doubled executive pay last year. That is not sitting well with shareholder NCH Capital, which called the pay raise “indefensible” and “offensive.”
Buzz Around the Office
Chivalry is Dead (NBC Florida)
A 35-year-old Florida man made a rather unromantic attempt to keep his girlfriend from moving out. He reported her kidnapped and in a U-Haul headed north. It didn’t work – for his ex or the cops.
List of the Day: Networking Tips
Many of the most prestigious, best paying jobs on Wall Street aren’t posted, making networking an absolutely critical skillset. Here’s what to do.
- Tap into your alumni network.
- Contact organizers of industry events.
- Don’t overestimate the power of social media. Show your face!
