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HSBC banks on UK

Robert Peston | 09:43 UK time, Wednesday, 11 May 2011

For all HSBC's mutterings that it's fed up with having the UK as its home base - because of the incremental tax it pays here and what it perceives as an anti-bank climate - there is no evidence from today's strategy review that it is growing any cooler on having a big presence in the UK.

A branch of HSBC bank near Westminster Abbey and the Houses of Parliament

In fact, if anything, the opposite is implied by its assessment of where best to allocate its capital and expertise over the coming decade. The UK is categorised by HSBC as a "strategic market", which is HSBC's highest accolade, partly because it has a massive presence in retail banking here and partly because it wants to be "the UK's leading bank for international businesses".

Interestingly, and in spite of the superior growth rates of emerging economies, HSBC expects the UK to still be the sixth largest economy in the world in 2050, only a fraction smaller than Germany, but bigger than Brazil, Mexico and France.

The British economy is expected by HSBC to grow faster than the US, Japan, and France over the coming 40 years - and a bit slower than Germany (but, of course, massively slower than China, India, Brazil, Mexico and Turkey). Some of that British momentum, compared to the eurozone and Japan for example, is presumably due to an expected faster rate of population growth in the UK - which is not universally popular.

But even so, income per capita in the UK in 2050 is predicted to be $49,000, 6.5% below German income per head and almost 20% greater than French per capita income.

For HSBC, the important trends are expected annual growth of world trade of 8.9% in the coming 10 years and the persistence of huge financial imbalances between the saving and exporting nations (China, India, Germany, and so on) and the consuming and borrowing nations (the US and much of Europe).

Interestingly, HSBC expects the UK to be a rare example of a country moving from deficit into surplus, by 2020 (or rather it buys into the analysis of the consultants McKinsey and the World Economic Forum to that effect - although there is a bit of a mystery here, because HSBC attributes the forecast to McKinsey, but it's not in the relevant McKinsey document).

The point, for HSBC, of analysing the world in these terms is that it wants to be the leader in financing those swelling trade flows between emerging economies and developed ones, and also in the related businesses of shipping China's and India's and Taiwan's surplus capital to the US and Europe.

Which means that what it calls Global Banking and Markets (and others call investment banking) together with its Commercial Banking arm will be the focus of future expansion.

That looks rational for one of the world's genuinely global banks. But it is slightly disturbing for the rest of us, perhaps, because the bank is assuming that the leaders of the G20 most powerful economies will fail in their avowed aim of stabilising the global economy by reducing China's funding surplus and America's funding deficit, the imbalances that were a fundamental cause of the great crash of 2007-8.

HSBC's success in that sense seems in part to be predicated on the idea that the global financial economy won't become a much safer place.

Like all sensible businesses, HSBC say it will reallocate capital to where it sees superior growth or where it has substantial market shares. So it will only stay in retail banking in places, like the UK for example, where it is big enough to be a price leader, rather than a follower.

The new chief executive, Stuart Gulliver, recognises that current returns are too low, partly because the bank's running costs are too high. So it plans to reduce annual costs by between $2.5bn and $3.5bn over the next three years - though it hasn't said how.

There is one cost that particularly rankles with HSBC - the special banking levy imposed by the British government. What it finds particularly galling, I am told, is that it pays the levy on uninsured deposits outside the UK, which most would see as a stable form of funding that contributes to the perception of HSBC as being a relatively safe bank.

Given that Treasury said the levy was designed in part to encourage banks to finance themselves in a more prudent way, it is a bit odd that the levy is costing HSBC around £370m this year, almost exactly the same as Royal Bank of Scotland and Barclays, and £110m more than Lloyds, in spite of HSBC's funding arrangements being widely seen to be much more prudent and stable than those of the other UK banks.

It is perhaps understandable therefore that HSBC hopes the Treasury will look again at the structure of the levy. Although - as I've said and elucidated before - HSBC's not-very-veiled threat to leave the UK if the levy isn't reformed doesn't look credible.

Comments

  • Comment number 1.

    Our population may be forecast to grow fast but I wonder what proportion are forecast to be single parent teenagers, I wonder what proportion will be clinically obese, I wonder what proportion will be couch potatoes, I wonder what proportion will expect an easy life and everytihng handed to them on a plate.

    I wonder where the investment will come from for all these people to make the UK great again?

    It is interesting that today lots of people are leaving Rome due to the forecast of an earthquake on May 11 flattening Rome made by somebody who died in 1979 - how ridiculous I thought.

    Then I read this article where our future prosperity is mapped out based on our population growth over the next 40 years - now that's the kind of job I would like - forecasting forward 40 years; if you're wrong you've already retired!

  • Comment number 2.

    "The UK is categorised by HSBC as a "strategic market" Don't you mean strategic rip off ?

    Bob Chapman explains the Silver take down which happened same time as the Osama drama :-

    http://www.youtube.com/watch?feature=player_embedded&v=u6JoFsDwTv0

  • Comment number 3.

    HSBC like every other Global Bank, have no real loyalty for any particular country in which to base it's main office. The moaning here and there about how much tax is paid, levies and other inherent costs to the profit margin are all part and parcel of, yes you guessed it, Globalisation. Quite how any bank can complain about paying UK tax on foreign or offshore money is conveniently - contradictory. On the one hand it bases itself to be in pole position to take advantage of growth in the economy and profits in Britain, drawing in foreign investment to help fuel its own profitability, and then moans about the levy in the form of taxes it has to pay to facilitate it. What this attitude does remind us of however, is that Banks and Global Business generally do not see themselves as loyal to any country so long as the profits are worth staying in that country. Following the worldwide collapse in the banking sector, the lesson of corporate responsibility by Globalised Banks has yet to learned, and that applies equally to our Government who have dithered over what to do to prevent another financial catastrophe. As we live in a 'Global Economy' there is no point exposing the people of any country to another possible 'Mega Billion Pound/Dollar' failure - our government has not moved on and brought in any significant safeguards to the people of our country. So as Banks moan and threaten to move their profits away, it begs the question, is £90billion in Taxation worth the potential £100's of Billions of risk that a Global Bank poses to our taxpayers ? Simple Answer: Unregulated = No !

  • Comment number 4.

    13 mins in you get the Greek debt story from Dr Tobras :-

    http://www.youtube.com/watch?v=8Q5Hn2Frx0o

    Then make a link with the US jail break countries :-

    http://tarpley.net/2011/05/08/bin-laden-reality-tv-mass-brainwashing/

    "This is very dangerous stuff; this is the collapse of the US empire and this is the counter measures to slow down the collapse."

    'The CIA becomes its own Wiki-leaks'

  • Comment number 5.

    I love the way these people always talk about growth without any reference to declining resources, but hey it just wouldn't do for any corporation to say there won't be any growth and debts just can't be paid back. Even, can they sense the perturbation in the forces of human civilisation and I'd love to see the solution that allows them to confidently predict growth of xyz%. If the specific behavior of massive planets is too complex for totally accurate prediction, then what are the chances for a global human society consisting of economic, social and political systems that are enormously specialised and inter-dependent?
    How will the predictions be affected by the ongoing disasters in Japan, or the worsening sovereign debt situation in Europe, or where and when will the next Middle Eastern revolution break out. Or even will the Lib dem dems be given some costly consolation prize for losing?

  • Comment number 6.

    At No.1 GRUMPUPNORTH77.

    Excellent Logic. Maybe we could Job Share !

  • Comment number 7.

    "...imbalances that were a fundamental cause of the great crash of 2007-8...."

    The cause of the "great crash" in 2007/08 was the banking defaults. which sprouted everything else. I'd not be inclinded to say that a trade surplus/deficit was the cause...

  • Comment number 8.

    8.9% annual growth over ten years gets yo to 134% increase by the end of that ten years. Where are the resources?
    Isn't there a downturn every ten years or so? No mention of that.

  • Comment number 9.

    Perhaps we would be more sympathetic to their plight if they (and their colleagues) had not caused the greatest economic disaster in living memory.

    Perhaps I would feel better towards them if people in the U.K., Europe and around the world had not lost their homes, businesses, careers, futures and any prosperity because of their actions.

    Perhaps I would feel better towards them........

  • Comment number 10.

    tony_was_here is right - resources are not abundant worldwide - and Hsbc is high on cocaine if it says the Uk is going to grow that fast until 2050. Where's the anticipated growth in the UK going to stem from? Natural resources? They're nowhere to be seen. Productive capital? Are still many factories left? Human capital? With due respect, China and India are not inferior, and nor are Russia and Brasil. The financial industry? Hah hah. Colonial war? On planet Mars, perhaps. Reality will be a lot harsher.

  • Comment number 11.

    7. At 11:30am 11th May 2011, SubbyTNA wrote:
    "...imbalances that were a fundamental cause of the great crash of 2007-8...."

    The cause of the "great crash" in 2007/08 was the banking defaults. which sprouted everything else. I'd not be inclinded to say that a trade surplus/deficit was the cause...


    China has a trade surplus with the US.
    So China has lots and lots of dollars.
    So China buys lots and lots of US Treasuries.

    So US interest rates are depressed.
    So US citizens borrow lots and lots of money that they can't pay back, to buy all those Chinese goodies.

    And eventually it all falls over.


  • Comment number 12.

    Ask HSBC how much they're putting into risk equity capital for start-ups and early stage companies. I would guess it's probably nothing. Let it go. It's a waste of space.

  • Comment number 13.

    8. At 11:42am 11th May 2011, Kit Green wrote:
    "8.9% annual growth over ten years gets yo to 134% increase by the end of that ten years. Where are the resources?
    Isn't there a downturn every ten years or so? No mention of that."

    World trade increases quicker than World GDP as countries become more specialized in what they produce.

    Somebody's Law of Comparative Advantage (Riccardo?)

  • Comment number 14.

    RP wrote:

    >'Some of that British momentum, compared to the eurozone and Japan for >example, is presumably due to an expected faster rate of population growth in the >UK - which is not universally popular.'


    Oh, I get it now!

    So it's big businesses (such as HSBC) that are demanding increased immigration to the UK in order to grow their consumer base! (and doing it via captured government). It's not just about immigrants filling job vacancies that can't be filled by current UK nationals.

    Gee, now I get the immigration policies of successive libertarian UK governments (of either colour) over the past 40 years.

    I guess the logical conclusion then is that despite all Cameron's hardline rhetoric against increasing immigration, it will actually RESULT in increasing immigration/population purely for big business expansion as decreed...er, I mean predicted by the likes of HSBC.

  • Comment number 15.

    11. At 11:53am 11th May 2011, treacle_01 wrote:
    China has a trade surplus with the US.
    So China has lots and lots of dollars.
    So China buys lots and lots of US Treasuries.

    So US interest rates are depressed.
    So US citizens borrow lots and lots of money that they can't pay back, to buy all those Chinese goodies.


    and the US government forced the banks to grant mortgages to people who could not afford them.

    Of course, the banks were not blameless.

    In the real world everything has many, interlinked causes.


  • Comment number 16.

    Cimbeline (no3) raises an interesting question - what do we do with the £90bn of taxes recieved from banks? Any prudent person would first say what are the potential costs and therefore use the money to deal with them. In this case the costs are the potnetial £100bns of risks the taxpayer is asked to underwrite. Therefore set up a fund so that the money is available to cover the risk - become the insurance fund that they need. So that we don't end up providing a blank cheque make it an obligation that the bank provides transparency (details to be worked out). Then the government can use what ever is left over of the £90bn to spend as it likes.

    What the government has done incorrectly is to assume that the £90bn was free money it could spend as it liked. Big mistake! But of course, governments, especially left wing governments, are not concerned about prudence - they want to buy their way to power and follow their dreams.

    Which takes me back to one of my main solutions, don't trust governments with our money. Governments need to be strictly controlled to not spend money, a powerful independent agency needs to be created that enforces financial prudence on governments.

  • Comment number 17.

    4. At 11:06am 11th May 2011, flicks3 wrote:
    13 mins in you get the Greek debt story from Dr Tobras :-

    http://www.youtube.com/watch?v=8Q5Hn2Frx0o

    Then make a link with the US jail break countries :-

    http://tarpley.net/2011/05/08/bin-laden-reality-tv-mass-brainwashing/

    "This is very dangerous stuff; this is the collapse of the US empire and this is the counter measures to slow down the collapse."

    'The CIA becomes its own Wiki-leaks'

    You might want to read this blog from FT as well- http://blogs.ft.com/beyond-brics/2011/05/11/hsbc-strategic-ems-and-the-rest/

  • Comment number 18.

    Isn't the real reason that HSBC wants to stay is that by staying it will maximise its profit?

    The old Midland Bank part is therefore most likely to be a milch cow for both cash and profit.

    They think this will go on becasue of the benign regulatory and tax environment (mainly regulatory). For benign read globally lax and incompetent - so no change there then!

    On inflation: - the BoE thinks it will be higher than estimated but as it is so [insert- see previous paragraph for adjective] that is will yet again fail in its duty to put up interest rates - they really are astonishingly damaging to the UK economy - they caused the bubble and crash and now they are determined to maximise and elongate the damage - but not putting up interest rates substantially as they should do, by their own rules.

  • Comment number 19.

    Britain and other semi-sophisticated bank indoctrinated countries are fertile ground for the banks. It would not pay them to move. They know a good grazing patch.

    Once the banks have infected other countries then they will be off.
    They will be learning though.
    Eastern europe was brought into the EU in order to expand their customer base.
    Didn't work. They will be trying again.

  • Comment number 20.

    14. At 12:03pm 11th May 2011, museV wrote: Oh, I get it now!

    Agreed. Population growth for the UK is a catastrophic policy.

    As for threats to leave the UK, the banks have nowhere to run. Their pariah status is assured since the exposure of the taxpayer subsidy and meltdown in Iceland.

    Haircuts, break-ups and tax the rich, please.

  • Comment number 21.

    How on earth can anyone take these pedictions seriously when they couldn't even predict a World recession 6 months in advance? Has it taken this much for them to start management accounting......unbelievable!!!

  • Comment number 22.

    Wee Scamp @12 has hit the nail precisely on the head.

    "Ask HSBC how much they're putting into risk equity capital for start-ups and early stage companies."

    All I'd add is the same thing for long standing manufacturing companies struggling through hard times. Germany kept BMW and France kept Renault, our Gov and banks kept nothing.

    It's true now, it's been true for more than half a century. Will the banks or our Gov ever see it?

  • Comment number 23.

    May I politely suggest that Robert Peston does an investigate/ blog on the high cost of utility bills for UK citizens.

    If your gas/electricity bills rise - you pay more VAT @ 5%. As tariffs of UK consumers rise, by mostly foreign owned energy companies penalise increasingly low use of UK citizens trying to save expenditure and yet reward high use by lower cost per unit. Madness! Please Mr Peston dig up this hornet nest that causes so much worry for ordinary working people?

  • Comment number 24.

    What a load of arrogant hubristic nonsense...

    IS anyone listening to these morons betting what the UK economy will look like in 2050?

    What makes them think there will even be a UK in 2050?

    Maybe I am being too harsh but if you really want to know what the UK economy will look like, don't ask economists, better asking a weatherman.

    After all, it seems or economy is somewhat weather dependent these days....

  • Comment number 25.

    "4. At 11:06am 11th May 2011, flicks3 wrote:
    13 mins in you get the Greek debt story from Dr Tobras :-

    http://www.youtube.com/watch?v=8Q5Hn2Frx0o "


    "Mad Max" - Isn't he great! I try to access news and info from as as many sources as possible to form my own, hopefully balanced opinion. Unfortunately though, my conclusion remains that "we aint seen nothing yet", hang on very tight folks, we could all be in for a rough ride!

  • Comment number 26.

    I'm very dubious about these growth forecasts. I suspect that it means that the London based finance industry expects that it will continue to extract or exact rent from the rest of the world.

    What will that mean forr the real economy in the rest of the country, or perhaps countries?

    As in the past, Britain's wealth will be sustained by various forms of piracy.

  • Comment number 27.

    Maybe the 8.9% p.a. over 10 years figure isn't in real-terms, and all it reflects is a bad dose of inflation?

    Which interestingly enough, is exactly what economics 101 predicts after you print billions of pounds of new money. I don't think labelling it 'quantative easing' is going to fool the economy.

  • Comment number 28.

    Has anyone asked HSBC how much they made from misselling monthly fee paying current accounts, which were introduced once the brakes were put on the Banks lending to customers (who blatently could not afford the repayments on personal Loans they were encouraged to take out, never mind claim from RPP's that were missold to them).

  • Comment number 29.

    #22 WolfiePeters wrote:

    'Germany kept BMW and France kept Renault, our Gov and banks kept nothing. It's true now, it's been true for more than half a century. Will the banks or our Gov ever see it?'

    You are being VERY naive imho.

    Big businesses look for markets, i.e. consumers - think Coca Cola, HSBC etc. They're like great economic hoovers. Think of lots of Alan Sugar's saying their job is just to increase returns for their shareholders etc. The less government in a country regulating in protection of the people (i.e. the 'freer' they are) the better, so investors back the 'wrong' types of governments. They're not being intentionally malicious, just doing what's good for their business (and that just tells one how useless/irrelevant terms like 'intention' are in explanatory positions).

    It has all been about asset stripping. The people making the money are internationalists and will move on somewhere else in time, i.e. find other 'emerging markets'

  • Comment number 30.

    Dear Mr Peston,

    I think the figures for "income per capita in the UK in 2050 is predicted to be $49,000" is in constant USD year 2000, should people think this is somewhat too small. I think the GDP per capita growth from now until 2050 is then at about 1.8% per annum, down a tadge from UK longterm average of about 2.1% pa from about 1955 (my own sums but about right). Also I guess the population is assuming to increase at about 0.38% pa up from our past half century of about 0.28%. At the end of the day I guess that means the assumption is that GDP will be growing at about 2.1% to 2.2% per annum - so we have nearly recovered to the new normal (it will soon be time to tackle inflation!)

  • Comment number 31.

    Feeble attempts to regulate the banks have caused them concern. How will they steal again...called anti-banking environment. Although none were held accountable for the greatest theft in history they feel put upon by the governments reluctance to tax their people into poverty to maintain the wealthy. The decline of the West is the result of what the bankers have done...and now they want more power...invited by the gutless and corrupt political processes that refused to hold them accountable. The idea that the bankers should be held accountable for the crimes they have committed in even a small way is an affront to their power. They simply will not accept any responsibility for what they have done....and certainly will not pay ..they stole the money fair and square...thanks to the elected representatives who made it all possible.

  • Comment number 32.

    18. At 12:34pm 11th May 2011, John_from_Hendon wrote:


    On inflation: - the BoE thinks it will be higher than estimated but... is not putting up interest rates substantially as they should do, by their own rules.

    ------------------------------------------------------------------------------------------

    Here we go again John. This 'inflation' isn't actually an expansion of the economy, it's an increase in the cost of imported energy and other essentials. How can it be a sensible response or solution to these unavoidable price rises by then putting up interest rates?

    I'm quietly coming to the conclusion that you probably don't have any outstanding loans or mortgages... :)

  • Comment number 33.

    Anyone who has worked with HSBC will vouch they are no1 at wasting money through a dogmatic "We know best attitude" when it is clear they no nothing...

  • Comment number 34.

    museV @29

    I am being a little naive, especially in the UK sense. As you say, the smart money looks for the fast buck.

    To be sure, I don't want a UKGov that over regulates or attempts to organise UK industry. On the other hand, I'd like a UKGov that thinks about the long-term cost benefit of how it spends and invests its (or actually our) money.

    The fact remains that BMW isn't still in existence just through the brilliance of the Quandt family. German banks have long played a partenrship role in German maufacturing industry that no longer exists in the UK (the bucks aren't fast enough from manufacturing). These days I regularly read Carlos Ghosn stating what a brilliant company Renault is. However, the brilliant company would not exist to bring cash into France and provide French jobs if the French government had not poured many millions of Francs into it for decades.

    You quoted Alan Sugar, may I quote John Harvey-Jones? He told the bank that was 'financing' Norton Motrocycles back in the 1980s that their drip-feed of money was insufficient for the company to grow, but just enough to ensure the business died about as slowly as possible. He was right, not doubt he still is....

  • Comment number 35.

    There is nothing particularly wrong with global business making profits and making long term strategic plans and there is no reason why these businesses should be loyal to any country or another. Equaly there is nothing wrong with states that have economies the size of UK - seeking to encourage/discourage one type of business or another again on the basis of long/medium term strategy. In the UK however our options are limited by the choices we have already made in the past and the pain that would result from making a material change.

    Most would agree that we need a smaller and more effectively regulated financial sector and a more balanced economy with other sectors taking up more of the growth. Whilst we are at it we could do with the banks we have being smaller and not able to threaten the whole economy if they go bankrupt.

    However, to get there we need to invest heavily in whatever other sectors we need to grow and decide we strategically wish to grow in and regulate/break up the financial sector to the point where a bank like HSBC might think about going elsewhere.

    This however isn't going to happen - first because it requires signficant political courage of the sort that is not going to come from a coalition particularly not from one with the intellectual capacity of a very small newt - second because it would require a massive shift of culture, cash and approach to break out of our addiction to debt, celebrity culture and the delusion that a vibrant finance sector can pull us out of this mess without need to suffer any loss of standard of living at all.

    What will happen is that government will try to drift its way out of the mess without major reform - so best case is a long drawn out struggle with no material change in the stuff that caused it in the first place.

    The alternative which would be to reform the finance sector root and branch is politically impossible for the present crew - rome is not yet burning strongly enough for this type of solution to be feasible. That may not however always be so. A continuing soveriegn debt crisis in europe, signficant reductions in growth in china and india, and the US finally deciding its needs a dose of austerity could just do it. If that happens it wont matter much where HSBC decide to operate.

  • Comment number 36.

    Actually I think HSBC should leave UK, they never trade their customers very well, several years ago, they closed 300K accounts all over the world, it seemed they only like richman. Their interest is the lowest in UK, they are fee is the highest. Arrogant bank should leave Britain.

  • Comment number 37.

    Russell,

    Even if John is not mortgage free, I am. The prudent are being hung out to dry, for the benefit of the profligate. I may not need to live on the interest generated from my savings, but I am as mad as hell at the derisory return, when compared to inflation. Our esteemed Governor may keep saying it's temporary. Perhaps he would like to define temporary. People on fixed incomes are seeing their hard earned pensions eroded and will become poorer through no fault of their own.
    Imported inflation is also linked to low interest rates, which are depressing the value of the pound.

  • Comment number 38.

    GREECE: AUSTERITY INDUCED RECESSION

    'Oddly ironic this: the "bankers" arrive to make austerity even more aggressive (so there is more value left over to senior bondholders when the bankruptcy commences), just as the country experiences a deja vu moment of strikers on one side and teargas lobbing policemen on the other. Those who wish to follow the protests live, which so far the mainstream media has refused to show, can do so here.'

    http://www.zerohedge.com/article/greece-stages-another-24-hour-strike-european-officials-arrive-enhance-austerity-live-webcam

  • Comment number 39.

    THERE IS NO SUCH THING AS INFLATION!

    http://fiatsfire.blogspot.com/

  • Comment number 40.

    Whatever. HSBC, just like any other international bank - such as Barclays, Lloyds, Santandar, Nat West and the rest, etc., will do, and behave, just as they choose and go wherever they wish.

    None of us have any say in the UK - least of all UK tax-payers who bailed out certain banks who are, in fact, interlinked? Increasingly the public have less respect for so-called building societies, who are more sly and disingenuous than most banks?

    What I will state, however, that a subsiduary of HSBC is First Direct telephone banking. The best and most efficient and all British telephone banking! Fabulous and no complaints in 12 years of using First Direct. No mistakes - and you get through to real people straight away. Why can't all banks do that?

  • Comment number 41.

    The banking levy isn't the most important thing that HSBC has to worry about.
    The results of the EU investigation could cost some major investment banks BILLIONS. The EU Commission has started an investigation into whether 16 of the world’s biggest INVESTMENT banks abused their positions in the CDS market. As we should all know by now, CDS (a financial derivative) played a prime role in the SOVEREIGN DEBT CRISES.
    The banks include American giant Goldman Sachs as well as British giants Barclays, HSBC and RBS.
    A credit default swap is insurance against a default by a counter-party, which may include a sovereign country. Increasingly CDS have been used to speculate i.e. gamble; there have been multi-billion CDS contracts organised "under the table" (so to speak); in other words, not through regulated exchanges; this, of course, makes the deals impossible to monitor. In a weak attempt to regulate, regulators tried to forced investors to use a financial clearing-house. Instead, it would appear that huge investment banks simply took control of the market for themselves.
    The financial derivatives market is worth a conservatively estimated £400 TRILLION; yet, it remains unregulated. How did this ever happen? A EU regulation will likely be in place before the end of the year.
    If found guilty, the Commission could fine these 16 huge investment banks @ 10% of their annual global turnover, which will lead to fines of several BILLION pounds.
    For some reason The Coalition Government, as well as the AMERICAN Government, continue to convey platitudes like "CDS have there uses; derivatives have their uses." I guess they do. Look at the financial hole they have dug for the rest of us!

  • Comment number 42.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 43.

    Despite years of "banker-bashing" by many of us, we can't really complain too much about HSBC or Barclays.
    The vast complexity of their international operations is beyond most of us, and I doubt if even the banks themselves have quite got a "handle" on all of it.
    And there are a few nasty "skeletons in the cupboard" that are working their way through the banking system now.
    OF COURSE growth rates in the "developing" world are going to be higher than in the "developed" world, and may be so for decades.
    Simply raising basic living standards in most of these countries is going to create major "growth".
    In this century we can expect them all to "catch up" with the West, and quite right, too... (barring political upheaval, or war).
    But the "scramble for resources" is an argument for another day.

  • Comment number 44.

    terrypaineismyhero #37

    Quite so.Where did we go wrong! For without doubt we are being ignored whilst the
    spendthrifts are being rewarded.I receive diddly squat on my hard earned savings
    like so many others who took the sensible route.Its an undeserved kick in the teeth.

  • Comment number 45.

    #7. 'The cause of the "great crash" in 2007/08 was the banking defaults. which sprouted everything else. I'd not be inclinded to say that a trade surplus/deficit was the cause.'

    No. The bank defaults were just an inevitable symptom of the problem. As are the sovereign debt problems in Greece, Portugal and Ireland.

    The real problem which encompasses all of these and more besides are the national credit/debt imbalances which have been largely ignored by Western countries. Only the brave and responsible are even prepared to acknowledge this elephant in the room.

  • Comment number 46.


    In its first quarter figures am I right in thinking HSBC's cost income ratio reached 60%+, do we think that has anything to do with the Chief Executive's approach to steep cost reduction? And if you predict world economic growth then income grows then cost:income ratio improves?

    I simply don't understand why you posted this one Robert; is the big news HSBC wants to stay in the UK really or is it HSBC wants lower tax or is it what exactly?

  • Comment number 47.

    The article in a nutshell. We are stuck with HSBC and all the other banks because no other country is insane enough to want you.

    Oh goody.

  • Comment number 48.

  • Comment number 49.

    @ 37

    + 1

  • Comment number 50.

  • Comment number 51.

    "The British economy is expected by HSBC to grow faster than the US, Japan, and France over the coming 40 years - and a bit slower than Germany--- "

    ---a rather safe prediction -- as most of us will be dead and buried and there would be no need for an apology --if wrong !

  • Comment number 52.

    Please stop the HSBC bashing! HSBC only one that did not fail - even Barclays had a huge injection of cash from the Middle East! Stategy on savings and lending that was in place worked - a tight lending policy ensured bad debts kept to a minimum in the UK. (Household in the US was a different story).

    They have also set aside millions to lend to business - but that business needs to be plausible & have undertaken research and invested time in producing business plans & cash flows. 100% loans are not an option - 100% risk to the bank & 0% risk to the business - what incentive is there for that business to succeed? Reasons for not lending include: the level of existing personal debt and adverse credit - past history shows that banks will have to write off the loan in the future if lent now. It's like giving money away for free - what other business would do that?

  • Comment number 53.

    I am not a great lover of banks but feel that I have to say this: And keep local banking!!!
    I have to admit that HSBC has been good to me over a long time (what used to be Midland Bank) I have used them for the last 30 years. Never had a problem with their service and have not been ripped off so far. I got a phone call a few years ago from them as they were concerned that my credit card had been used for various transactions in the Far East amounting to thousands of pounds. A bit puzzling as the card on receipt had been immediately put into my safe at home and then never seen the light of day .They assured me all was ok and sorted it all out.
    I also had a little issue about 15 years ago when I required a bridging loan for about 15K for about a week during a house move to prevent it falling apart. I met up with one of their staff personally, she decided no problem whatsoever, and I was charged very little for the service. I have and will remain loyal to my bank for this, but who knows what lies ahead I hope that locally they keep up the good work but who knows what lies ahead???

  • Comment number 54.

    Aww does little banky wanky not likey wikey the lots of money we gave them? If they bugger off with my parents' money the damned lot of their shareholders and Board of Directors will be jumping to the top spot in my Most Wanted List. In fact I think Gadaffi, the leader of the Congo, and Kim Jong Il would be pleased if you did that.

  • Comment number 55.

    Banks can be considered as parasites just as Mistletoe is on various trees.
    Mistletoe gets spread in bird poo.
    Banking gets spread directly by bankers greed.
    Once a tree or country is infected the parasite stays.
    The tree and country gets sucked and sucked.
    If the tree or country dies then so does the infection. The vector lives on though.
    So it looks like we are stuck with HSBC until we are sucked dry.
    Mistletoe gives fruit to birds. What do banks do apart from sucking wealth from the host country and enriching bankers? Would we be better off without the vectors?
    Do we need the trickle down of bankers poo?

  • Comment number 56.

    #53 Tim from Sandhurst

    A long long time ago I banked with the Midland. Put my wages in every week.
    Come holiday time I withdrew it. Snotty teller asked me if I was closing my account.
    Embarrassed me by telling everybody in earshot my worldly wealth etc.
    Meant a big thing at the time. Needless to say I don't bank with the Midland no more. Everybody has different experiences.

  • Comment number 57.

    Glencore: Profiteering from hunger and chaos

    http://english.aljazeera.net/indepth/features/2011/05/20115723149852120.html


    "The price for our daily food has at least doubled in the past two years," Lia Romi told Al Jazeera through a translator. "Food costs 100 per cent of my family's daily income [of about $3]. I have nothing saved and I owe [money] from my [market stall] business."

  • Comment number 58.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 59.

    To #37, #44 & #49....

    Guys, I think we've hit on something - the low interest rates are hurting those of you with mortgages paid off and on fixed incomes, while at the same time are keeping afloat those of us that still have many years of to pay off loans that are now much higher than the current re-sale value of our properties.

    I understand that and both sympathise and am more than a little jealous of your debt-free position. But honestly, not everybody that still has a mortgage is profligate or greedy or stupid! We're just younger and in a different phase of the cycle and bought homes for our families at higher market prices than you had to.

    You guys have got through it and at least have your roof over your head whereas if many of us were to lose our jobs now we'd become totally homeless very quickly. So, I suspect that the overall fallout for the whole of society will be worse if the rates go up any time soon rather than if they stay at current lows - certainly until job prospects and the property market reinflate.

    However, my original point was that raising interest rates won't fix higher imported prices, although terrypaineismyhero's counter that an interest rate increase might raise the value of Sterling and thereby offset these price rises is interesting. I just don't think that the BOE wants the value of Sterling to rise though, as that would stall any potential export-led recovery.

    It's a tricky one....


  • Comment number 60.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 61.

    If you want the country to get out of the mess its in then business has to grow and export abroad. The best way to achieve this is for the BofE to lower interest rates further, force low interest rate loans for business from the government/banks, to signal that the low rates will last a minimum of 10 years.

 

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