If Britain withdraws from the European Union, the chief executive of HSBC Holdings Plc, Stuart Gulliver said that the lender may move around 1,000 investment bankers to Paris. The move will arise from within HSBC’s global banking and markets unit, which employs about 5,000 in London. The announcement came a day after the Bank’s announcement to keep its headquarters in London, ending 10 months of deliberations. Brexit has already caused a loss of investment in Britain and the development could accelerate if it looks like the country will vote to leave.
On his earlier decision to cancel a global pay freeze, Mr Gulliver said the measure was unfairly impacting junior employees. The plan now is to make the savings in next year’s bonus pool, rather than this year’s salaries, he said. Meanwhile, the Bank announced a 1 per cent rise in pretax profit for 2015. Before tax, full-year profits came in at $18.8 billion. Adjusted revenue rose 1 per cent in 2015 to $57.7 billion, little changed from $57.2 billion in 2014. Meanwhile, return on equity for the year stood at 7.2 per cent, slightly lower than 7.3 per cent in 2014. For the last three months of 2015, the lender recorded a net loss of $1.3 billion, compared with a net profit of $511 million a year ago.
Standard Chartered reported a pre-tax loss of $1.5 billion (Rs 10,288 crore) for 2015 – its first in 26 years of global operations. A bulk of it, $981-million (Rs 6,728-crore), was on account of its biggest-ever loss in India; the bank reporting a $1.3-billion (Rs 9,781-crore) hit in its Indian operations.
The bank had made a profit of $4.2 billion (Rs 28,800 crore) in CY2014.
The impairment losses on loans in India were also the highest at $1.3 billion for StanChart - more than double of the $611-million hit it took due to credit losses in the UK. India was the largest contributor to StanChart's profits until 2010. It was the only multinational entity to list here under the Indian Depository Receipts route in 2010.
Meanwhile, the Bank is considering taking back bonuses from about 150 current and former senior staff according to the new chief executive, Bill Winters. Standard Chartered had established "accountability reviews" to investigate if bonuses can be recouped from any people found to be responsible for compliance and risk-management breaches.
The UK-backed Royal Bank of Scotland (RBS) reported its eighth straight full-year loss of 1.97 billion pounds ($2.75 billion). The loss was 43 per cent lesser than the bank’s loss of 3.47 billion pounds for the previous year.
The Bank’s restructuring costs reached 2.9 billion pounds, while its conduct and litigation costs totalled 3.6 billion pounds. RBS is still 73 per cent owned by the British government.
Deutsche Bank will buy back more than $5 billion in senior debt. The lender said that it would launch a tender for euro-denominated unsecured bonds worth 3 billion euros ($3.38 billion) and a tender for dollar-denominated bonds worth $2 billion. “The Bank’s strong liquidity position allows it to repurchase these securities without any corresponding change to its 2016 funding plan,” Deutsche Bank said in a statement.
MasterCard customers will soon be able to replace their passwords with a ‘selfie’ and fingerprints to verify their identity and make payments online. The payment processing company confirmed the decision to introduce biometric checks at the Mobile World Congress in Barcelona in February. Trials had been run on biometric checks in the US and the Netherlands and MasterCard would soon launch the facilities in the UK, according to Ann Cairns, head of international markets for MasterCard.
In a bid to refocus on its core UK and US markets, Barclays has decided to sell its African operations. A subcommittee has been delegated the authority to examine the practicalities of how and when to sell Barclays Africa, one of its four main lines of business. By delegating authority, it avoided having to disclose the decision immediately.
This means that a sale of the bank’s 62.3 per cent stake in its Johannesburg-listed subsidiary will depend on numerous factors, including market conditions and the response of regulators. In a separate part of the business, Barclays plans to cut about 150 jobs in Dubai as it restructures its Middle East corporate banking business.