HSBC Results

[idpickering]

Key highlights

"– Good quarter in challenging operating conditions
– Adjusted revenue up 2% on 3Q15
– 4% fall in costs, reflecting the effect of transformational cost saving programmes
– Strengthened capital position following a change in the regulatory treatment of our investment in BoCom
– Adjusted loan impairment charges and other credit risk provisions (LICs) up US$0.1bn on 3Q15, down US$0.2bn on 2Q16 "

Later;

"Our aim is to sustain the dividend through the long-term earnings capacity of our four global businesses.

We will contemplate share buy-backs as and when appropriate, subject to the execution of targeted capital actions and regulatory approval.

As of 31 October, we had completed 59% of the US$2.5bn equity buy-back announced in August 2016. We expect to finish the programme by the end of 2016 or early in the first quarter of 2017, depending on market trading volumes in the fourth quarter."

Divi held for quarter Ex div 23 Feb 17 paid 6 Apr 17

http://www.hsbc.com/investor-relations/ ... esentati...

[idpickering]

Here's the announcement as presented on Investegate also;

Highlights

Strategy execution



• Further reduction in RWAs through the completion of Brazil disposal and other management actions.
• Reduction in 3Q16 operating expenses on both a reported and adjusted basis to $8.7bn and $7.2bn respectively.
• Positive adjusted jaws of 5.6% for 3Q16, and 1.5% for 9M16.
• Increased market share in a number of key markets and international product areas, including trade finance in Hong Kong and Singapore.
• Share buy-back programme is now 59% complete and expect to finish in late 2016 or early 2017.

Financial performance
• Adjusted profit before tax ('PBT') in 3Q16 of $5.6bn, up 7%; reported PBT of $843m.
• Adjusted revenue in 3Q16 of $12.8bn, up $0.3bn from increases in client-facing GB&M (+11%) and Principal RBWM (+9%); reported revenue in 3Q16 of $9.5bn, down $5.6bn reflecting the impact of significant items.
• Adjusted PBT of $16.7bn in 9M16, down 6% or $1.0bn; reported PBT of $10.6bn.

Capital
• Strong capital base with CRD IV end point CET1 ratio 13.9%, up from 12.1% at 30 June 2016, mainly due to a change in regulatory capital treatment of BoCom.

http://www.investegate.co.uk/hsbc-holdi ... 00064372O/

[Arborbridge]

Ian,

I'm glad to see to you posted here as well as in the old place:)

Have a virutal rec - until we get a rec system, that'll have to do.


Arb.

[idpickering]

"I'm glad to see to you posted here as well as in the old place:)"

Morning Arb,

Yeah, I realise some might not have got the memo regarding the closure of the boards, unlikely as that sounds.
Tbh, I probably will continue to do so until the end of those boards. I admit to having a bit of PTSD regarding the whole event!!

Regards,

Ian.

[YeeWo]

I admit to having a bit of PTSD regarding the whole event!.

PTSD! this did really Amuse Me. Can we not arrange a Class Action against TMF to cover the costs of Counselling! (Joking).
Not sure how much of the rise in HSBC SP is down to Results and how much is down to US Election?!!!
Glad you're here Ian, Best, YW.

[staffordian]

Another one here who's glad you've made the switch.

Please keep up the good work Ian.

Staffordian

[idpickering]

Thanks for your support guys, and am chuffed to see so many of the familiar 'faces' popping up here now.

Had enough PTSD having served in The Army for 14 years!! It doesn't go away.

Anyway, to get back on topic, long may our HYP community continue, and a massive thank you to the guys that made this happen.! A million recs for them.

Ian.

[toofast2live]

What irritates me about this announcement is the buy back of shares. Why not just give us the cash as a special dividend?

Oh yes, could it have a little to do with the board being remunerated on EPS, not shareholder value?

[Dod1010]

I am not comfortable with these Boards as yet but to return to the topic. These are surely good results. I am not going to carp about share buybacks because I think that having reduced the size of the business, reducing the number of shares in issue is quite a good thing as it increases, however modestly, my share in the business. What would you do with the cash if they returned it to you anyway? I would simply buy more shares in the business, and the cash receipt might even cost me something in tax.

So let's just rejoice that we have a share with an apparently sustainable yield of around 6.4%. This is the HYP Board after all.

[idpickering]

"So let's just rejoice that we have a share with an apparently sustainable yield of around 6.4%. This is the HYP Board after all."

If I could rec your post Dod, I would've. Have ne of Arb's imaginary ones instead.

To get back to the results though. I agree they're very good, and I'm happy about that. For me, I just let the managers get on with their job. My being concerned about anything beyond that is breach of Strategic Ignorance to me. If SI applies on this forum? LOL

Regards,

Ian.

[toofast2live]

Hey, let's not closedown debate.

It is no breach of SI or HYP to argue the merits of buybacks vs dividends. It is pretty fundamental to HYP. It's about how surplus cash (or debt) is used - whether to shrink the company, invest further in the company, or reward shareholders via a dividend.

As HYPsters we favour those companies that distribute a decent chunk of their earnings in dividends rather than buy backs and re-investment.

Oh, and I decide in which company I am going to re-invest those dividends - not HSBC!

So yes, lets rejoice in that dividend, but lets also be critical of the directors who manage our companies.

[idpickering]

"Hey, let's not closedown debate."

That was not my intention. The boards are for a place to discuss matters of course.

Ian.

[Dod1010]

But a share buyback is often not a dividend in the normal sense of that term, ie a payment from earnings. In this case we are talking about surplus capital ( I would imagine held as cash or a cash equivalent) I never treat such payments to a shareholder as a dividend but always buy more shares, usually in the same company, and as I said I might have to pay tax on it in my hands because as I understand it HMRC treats all such payments as income.

Retirement of some capital by means of a share buyback is a perfectly legitimate business practice and it leaves fewer shares (by definition) and so the possibility of a larger dividend per share. I like that.

[OLTB]

I'm really impressed with the figures - before I started the HYP journey, I had bought into TMF '5 shares to retire on' as I didn't really know what I was doing so thought it would be a good place to start. Tesco was one of the recommendations and, earlier this year, become despondent with Tesco, sold and bought HSBC (Pyad would be shaking his head I know). Anyway, I bought at 463 and, really pleased I made the switch as the dividend stream is at least 'on' as opposed to Tesco's woes. HSBC seem to be running a tight ship with control over costs and pushing for that important expansion into Eastern markets.

[Dod1010]

OLTB
Yes. HSBC and Tesco (of old at least) should never be mentioned in the same breath. HSBC is still recovering from their largely self inflicted wounds from their disastrous expansion of the first decade of this century. between buying Household (big sub prime lender in the US) and the Safra Banking Group (which was responsible for bringing in the ill fated problems on Switzerland) inter alia. At heart though they are a large well capitalised bank and conservative at that. They are not dependent on the interbank market for funds (in fact have always been net lenders) and probably have the best network for the financing of international trade, which is how they started.

However just remember that as they account in US Dollars, some of their share price increase is a direct result of the weakening of sterling. But their good dividend looks relatively safe.

[toofast2live]

Err, also remember that until recently they had a target of 10% ROE. They have actually just achieved about 5% ROE. I suppose on the bright side that leaves room for improvement.

Lots of room for improvement. The key issues for us HYPsters is is that dividend sustainable. Clearly at the current yield the market thinks that's a coin toss.

I hold, but my favoured financial HYP pick remains Provident Financial (although recently not particularly HY.)

[carioca]

Key highlights

Divi held for quarter Ex div 23 Feb 17 paid 6 Apr 17

Interesting. The first report I read about these results (on Yahoo!, credited to "International Business Times") says

However, the bank cut its third interim dividend from $0.30 to $0.10.

So, which is it? USD dividend cut but UK divident held?

carioca
(one of the account holders that's been "disposed of" in Brazil, causing me no end of problems.)

[Gengulphus]

Key highlights

Divi held for quarter Ex div 23 Feb 17 paid 6 Apr 17

Interesting. The first report I read about these results (on Yahoo!, credited to "International Business Times") says

However, the bank cut its third interim dividend from $0.30 to $0.10.

So, which is it? USD dividend cut but UK divident held?

No, the USD dividend was declared as 10c for each of the first three quarters last year and each of the first three quarters this year as well - see http://www.hsbc.com/investor-relations/share-and-dividend-information/dividend-history. And the sterling dividend is simply a currency-converted version of the USD dividend.

My guess is a rather elementary error by the author of the "International Business Times" article, namely comparing this year's Q3 dividend with last year's total-for-nine-months dividend. If you search the RNS for "dividend per ordinary share", you'll find a line with two 0.30s and three 0.10s on it - and the legend saying which period each relates to is quite a long way above it...

Gengulphus