HSBC scorns speculation on bid for bank
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The chairman of HSBC, Sir William Purves, poured cold water yesterday on persistent speculation that Britain's biggest financial group is poised to bid for another British bank. He said paying a premium to current market values in the high-flying sector would not be in the interests of HSBC's shareholders.
Speaking as the group announced much better than expected interim figures for the six months to June, Sir William added: "We don't have a shopping list. We're not active in this field, we've done quite a lot this year and we'll see that consolidate before we get excited about other things."
HSBC's first-half profits of pounds 2.62bn, up 13 per cent, were well above analysts' expectations of around pounds 2.4bn. After a higher than forecast 33 per cent rise in the interim dividend, to 20p a share, the group's shares soared in early trading, touching a record high of pounds 23.15 before closing at pounds 22.38, up 44.5p.
Even by the standards of the banking sector, HSBC's shares have been extraordinary performers over the past five years since the group acquired Midland Bank in a bid to diversify from its traditional Hong Kong base. Since the beginning of 1993, they have risen more than seven-fold.
Acquisitions by HSBC in the past year have focused on expanding its interests in Latin America, where it sees strong growth potential. According to Sir William, there is no shortage of opportunities for HSBC to buy businesses and the group will only consider returning excess cash to shareholders when those opportunities dry up.
Sir William said the handover of Hong Kong, where HSBC makes around half its profits, to China had gone smoothly. The group owns HongkongBank in the former colony and also a controlling stake in Hang Seng Bank. He said HongkongBank's results had been hit by a pounds 40m underwriting loss, but declined to give any further details.
The loss pegged profits from HongkongBank back to pounds 815m (pounds 818m), while Hang Seng Bank's profits grew 7 per cent to pounds 394m (pounds 368m).
HSBC reported growth in loans especially in Hong Kong, where the property market was buoyant, and in the UK where corporate and mortgage lending was up.
He said that margins were under pressure at Midland Bank although the bank had managed a sharp fall in the cost income ratio to 56 per cent, well down on the 70 per cent ratio when it was taken over. Midland increased profits by 17 per cent to pounds 512m.
Comment, page 15
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments