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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  HSBC Holdings Plc    HSBA   GB0005405286

HSBC HOLDINGS PLC

(HSBA)
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Five things to look out for in HSBC's new strategy

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02/13/2020 | 07:32pm EDT
FILE PHOTO: The HSBC bank is seen in the financial district of Canary Wharf

HSBC on Tuesday reports 2019 results and will set out its new strategy, where interim Chief Executive Noel Quinn will audition for the permanent role by announcing major restructuring efforts. Here are five key things to look out for:

1- Will Noel Quinn be confirmed as CEO?

The 57 year-old HSBC veteran has been through the world's most public job interview since being appointed interim CEO following the ouster of John Flint.

It would be odd for Chairman Mark Tucker to allow Quinn to present a new strategy if Quinn will not be the person to implement it - but media reports in the past few weeks have suggested Tucker could delay the appointment beyond Tuesday.

2- How will HSBC improve returns for shareholders?

Quinn's urgent task is to improve returns for shareholders, which have lagged HSBC's rivals in recent years.

(GRAPHIC: HSBC one-year shareholder returns - https://fingfx.thomsonreuters.com/gfx/mkt/13/2033/2001/HSBC%20returns.png)

3- How will HSBC improve its underperforming investment bank?

HSBC's global banking and markets division that contains its investment bank has been underperforming its commercial and retail banking businesses.

Quinn is expected to restructure the division that in 2018 had higher cost to income ratio and contributed a lower profit share than its two counterparts.

The bank is also cutting around 100 roles in its equities business, Reuters reported last month.

(GRAPHIC: HSBC investment bank costs - https://fingfx.thomsonreuters.com/gfx/mkt/13/2035/2003/HSBC%20costs.png)

4- Will HSBC further shrink its geographical footprint?

HSBC is in more than 50 countries across North America, Europe, the Middle East and Asia, but the latter of those regions accounted for 49% of its revenue and 90% of its profit in 2018.

The bank is now likely to accelerate efforts to boost revenues from Europe and North America, and gradually pull out from some of its low-returning markets.

HSBC is considering leaving Turkey and may also sell or reduce its business in other markets where it is struggling to compete with local rivals, Reuters reported earlier this month.

The bank is also likely to review its presence in some Latin American markets, a region that accounts for just 3% of its pre-tax profit.

(GRAPHIC: Asia dominates HSBC profits - https://fingfx.thomsonreuters.com/gfx/mkt/13/2036/2004/HSBC%20asia.png)

5- Will there be more cuts to senior management?

HSBC is also set to unveil a new round of job cuts targeting senior international managers at its headquarters in London and to a lesser extent in Asia.

The bank plans to trim expenses and simplify its complicated management structure by cutting a large number of global managerial roles across all business units - from investment to commercial banking.

An HSBC spokesman declined to comment.

(Reporting By Lawrence White and Sumeet Chatterjee. Editing by Jane Merriman)

By Lawrence White and Sumeet Chatterjee

Stocks mentioned in the article
ChangeLast1st jan.
AEROJET ROCKETDYNE HOLDINGS, INC. 5.53% 43.14 Delayed Quote.-5.52%
HSBC HOLDINGS PLC -0.84% 461.25 Delayed Quote.-21.84%
US DOLLAR / TURKISH LIRA (USD/TRY) 0.19% 6.5707 Delayed Quote.8.67%
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Financials (USD)
Sales 2020 52 473 M
EBIT 2020 20 195 M
Net income 2020 9 650 M
Debt 2020 -
Yield 2020 8,53%
P/E ratio 2020 15,1x
P/E ratio 2021 10,6x
Capi. / Sales2020 2,21x
Capi. / Sales2021 2,16x
Capitalization 116 B
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Technical analysis trends HSBC HOLDINGS PLC
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Income Statement Evolution
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Mean consensus HOLD
Number of Analysts 23
Average target price 6,90  $
Last Close Price 5,72  $
Spread / Highest target 79,6%
Spread / Average Target 20,5%
Spread / Lowest Target -25,6%
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Managers
NameTitle
Noel Paul Quinn Group Chief Executive Officer & Executive Director
Mark Edward Tucker Non-Executive Group Chairman
John M. Hinshaw Group Chief Operating Officer
Ewen James Stevenson Chief Financial Officer & Executive Director
Darryl West Chief Information Officer
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