The Hongkong and Shanghai Banking Corporation was founded in Hong Kong on March 3, 1865, and in Shanghai one month later. In 1980, HSBC acquired 51 per cent of Marine Midland Bank, buying the rest in 1987. HSBC Holdings was established in Britain in 1991 as the parent of The Hongkong and Shanghai Banking Corporation ahead of its purchase of the UK-based Midland Bank and the impending 1997 transfer of sovereignty of Hong Kong from Britain to China.
HSBC’s shares drop after it misses earnings forecasts
HSBC shares fell as much as 2.7 per cent in Hong Kong to the lowest in eight trading days after the bank posted annual results that missed market expectations.
The stock fell to HK$81.60 by 11am, after it dived more than 5 per cent in London trading yesterday, later closing at 635.70 pence, down 2.8 per cent from the previous day.
HSBC reported pretax profit of US$22.56 billion last year, up 9 per cent from the previous year, helped by lower impairment charges and improvement in bad loans. Analysts had expected US$24.5 billion.
Morgan Stanley said higher costs had offset the benefits of lower impairment charges at the lender, resulting in lower-than-expected results in the fourth quarter and for the full year. It reduced its price target for HSBC to HK$90 from HK$93 but reiterated its “overweight” rating, citing the bank’s strong position in Asia.
UBS also cut its price target, to HK$85.50 from HK$91.50, and maintained its “neutral” rating. It said the total dividend payout for last year, 49 US cents per share, was lower than the expected 51 US cents.
Barclays said it expected economic growth in China to continue to drive HSBC trade volumes and noted that management saw a strong corporate finance pipeline going forward in Hong Kong. It maintained its price target at HK$96 and its “overweight” rating.
Some 70.25 per cent of HSBC’s pretax profit came from Hong Kong and the rest of the Asia-Pacific region last year. The city contributed more than one-third of the group’s pretax profit last year and remained the bank’s largest market.