HSBC forecast that emerging markets will spearhead the economic recovery on Tuesday as the world banking giant said its third-quarter
profits were "significantly" higher compared with a year earlier. In an HSBC trading update, group chief executive Michael Geoghegan said that emerging markets would "drive the global recovery." In an eventful day for Britain's banking sector, Barclays bank also posted a drop in earnings and state-controlled lender Lloyds Banking Group (LBG) said it planned to cut 5,000 more jobs. "Banking issues are dominating traders' thoughts today," said IG Index chief market strategist David Jones. Britain's banking sector has suffered massively in the wake of the financial crisis, forcing the government to pump billion of pounds into major lenders such as Royal Bank of Scotland, LBG and Northern Rock. But HSBC and Barclays have avoided the clutches of the state -- the former by raising billions of pounds on the stock market and the latter by securing large investment from Gulf nations. HSBC, Europe's biggest bank, reported that underlying quarterly pre-tax profit was "significantly ahead" of figures a year earlier, saying the global economy was over its "biggest jolt." HSBC also said that its expenses linked to loan defaults fell to the lowest quarterly level for more than a year. "Pre-tax profit for the third quarter of 2009 was significantly ahead of the third quarter 2008," HSBC said in a statement that did not provide figures. Geoghegan added: "Driven by stabilised credit performance in the US, loan impairment charges have fallen to their lowest quarterly level for over a year." Stripping out debt costs however, HSBC said third-quarter profits were lower compared with a year earlier. "I believe that the biggest jolt has now passed through the global economy," Geoghegan said. "But it is too early to claim victory, especially while unemployment is still rising in the West. "The world will likely experience a two-speed recovery and emerging markets currently offer the brightest prospects for growth. Indeed, it now seems clear that they will drive the global recovery." Geoghegan added that in Asia, HSBC has been "encouraged by renewed activity" in equity markets and increased demand for wealth management products. "In Hong Kong, we increased commercial lending and maintained our leading position in mortgage lending," he also said. HSBC in September announced plans to move Geoghegan to Hong Kong from London as the "centre of economic gravity" shifts from West to East. HSBC, founded in Hong Kong and Shanghai in 1865, will remain headquartered in London and regulated by Britain but Geoghegan will relocate in February to be nearer the group's "largest and most important region" of operation. Barclays meanwhile on Tuesday reported sharp falls in third-quarter net profits as the banking group's bad debts soared. Barclays said profit after tax slumped 54 percent to 1.075 billion pounds in the three months to September 30 compared with the outcome for the third quarter in 2008. Net profits slumped 29 percent to 2.73 billion pounds in the first nine months of the year. Barclays said bad debt charges surged 63 percent to 1.4 billion pounds in the third quarter and by 65 percent to 6.2 billion pounds in the first nine months. Shrugging off the falls in profit, Barclays' chief executive John Varley said the group had "maintained strong income momentum in the third quarter," particularly at its investment banking arm Barclays Capital. Barclays last year won a seven-billion-pound capital injection largely backed by Abu Dhabi and Qatar, as it survived the credit crunch without government aid. But Abu Dhabi has since sold most of its holding. In addition, Qatar's sovereign wealth fund, the Qatar Investment Authority, recent trimmed its Barclays stake. Market regulator Securities and Exchange Board of India’s (Sebi) latest decision to mandate disclosure of balance sheets by companies on a
half-yearly basis is being viewed as a precursor for listed entities to mandatorily disclose their cash flow statements, a person familiar with the development told ET. Auditors say the move will improve transparency by giving investors a better picture of the financial health of the company. The two half-yearly balance sheets may not be exhaustive compared to the one provided to the investors at the end of the year. But using the two balance sheets, an investor will be able to work out the cash flow details of the company. Post the accounting fraud at Satyam Computer Services, the markets regulator has been tightening disclosure norms on a continuous basis so as to prevent or, at least, minimise the recurrence of such incidents. The Rs 7,000-crore fraud at Satyam came to light only after its former chairman B Ramalinga Raju admitted to cooking up the company’s accounts over a seven-year period, underscoring the negligence on the part of the internal auditors and external agencies. For half-yearly disclosures, companies need to provide the bourses with information about the credit rating on various instruments, asset cover available, debt-equity ratio, the previous due date for payments of interest or principal and the next due date. The information — which is to be mandatorily sent within a month from the end of the half-year period — will also mention whether the company had made payments on the interest/principal. Financial experts have welcomed the new Sebi rule seeking disclosure on the solvency position of listed entities to the shareholders saying that it will provide valuable information to the market. “In the past, disclosure of results provided information on the performance of a company but that could have come by taking an aggressive and risky position on the balance sheet,” said Dolphy D’Souza, a partner at Ernst & Young. “Now the investor will have a picture of the company’s performance and its liquidity and financial position also.”
profits were "significantly" higher compared with a year earlier. In an HSBC trading update, group chief executive Michael Geoghegan said that emerging markets would "drive the global recovery." In an eventful day for Britain's banking sector, Barclays bank also posted a drop in earnings and state-controlled lender Lloyds Banking Group (LBG) said it planned to cut 5,000 more jobs. "Banking issues are dominating traders' thoughts today," said IG Index chief market strategist David Jones. Britain's banking sector has suffered massively in the wake of the financial crisis, forcing the government to pump billion of pounds into major lenders such as Royal Bank of Scotland, LBG and Northern Rock. But HSBC and Barclays have avoided the clutches of the state -- the former by raising billions of pounds on the stock market and the latter by securing large investment from Gulf nations. HSBC, Europe's biggest bank, reported that underlying quarterly pre-tax profit was "significantly ahead" of figures a year earlier, saying the global economy was over its "biggest jolt." HSBC also said that its expenses linked to loan defaults fell to the lowest quarterly level for more than a year. "Pre-tax profit for the third quarter of 2009 was significantly ahead of the third quarter 2008," HSBC said in a statement that did not provide figures. Geoghegan added: "Driven by stabilised credit performance in the US, loan impairment charges have fallen to their lowest quarterly level for over a year." Stripping out debt costs however, HSBC said third-quarter profits were lower compared with a year earlier. "I believe that the biggest jolt has now passed through the global economy," Geoghegan said. "But it is too early to claim victory, especially while unemployment is still rising in the West. "The world will likely experience a two-speed recovery and emerging markets currently offer the brightest prospects for growth. Indeed, it now seems clear that they will drive the global recovery." Geoghegan added that in Asia, HSBC has been "encouraged by renewed activity" in equity markets and increased demand for wealth management products. "In Hong Kong, we increased commercial lending and maintained our leading position in mortgage lending," he also said. HSBC in September announced plans to move Geoghegan to Hong Kong from London as the "centre of economic gravity" shifts from West to East. HSBC, founded in Hong Kong and Shanghai in 1865, will remain headquartered in London and regulated by Britain but Geoghegan will relocate in February to be nearer the group's "largest and most important region" of operation. Barclays meanwhile on Tuesday reported sharp falls in third-quarter net profits as the banking group's bad debts soared. Barclays said profit after tax slumped 54 percent to 1.075 billion pounds in the three months to September 30 compared with the outcome for the third quarter in 2008. Net profits slumped 29 percent to 2.73 billion pounds in the first nine months of the year. Barclays said bad debt charges surged 63 percent to 1.4 billion pounds in the third quarter and by 65 percent to 6.2 billion pounds in the first nine months. Shrugging off the falls in profit, Barclays' chief executive John Varley said the group had "maintained strong income momentum in the third quarter," particularly at its investment banking arm Barclays Capital. Barclays last year won a seven-billion-pound capital injection largely backed by Abu Dhabi and Qatar, as it survived the credit crunch without government aid. But Abu Dhabi has since sold most of its holding. In addition, Qatar's sovereign wealth fund, the Qatar Investment Authority, recent trimmed its Barclays stake. Market regulator Securities and Exchange Board of India’s (Sebi) latest decision to mandate disclosure of balance sheets by companies on a
half-yearly basis is being viewed as a precursor for listed entities to mandatorily disclose their cash flow statements, a person familiar with the development told ET. Auditors say the move will improve transparency by giving investors a better picture of the financial health of the company. The two half-yearly balance sheets may not be exhaustive compared to the one provided to the investors at the end of the year. But using the two balance sheets, an investor will be able to work out the cash flow details of the company. Post the accounting fraud at Satyam Computer Services, the markets regulator has been tightening disclosure norms on a continuous basis so as to prevent or, at least, minimise the recurrence of such incidents. The Rs 7,000-crore fraud at Satyam came to light only after its former chairman B Ramalinga Raju admitted to cooking up the company’s accounts over a seven-year period, underscoring the negligence on the part of the internal auditors and external agencies. For half-yearly disclosures, companies need to provide the bourses with information about the credit rating on various instruments, asset cover available, debt-equity ratio, the previous due date for payments of interest or principal and the next due date. The information — which is to be mandatorily sent within a month from the end of the half-year period — will also mention whether the company had made payments on the interest/principal. Financial experts have welcomed the new Sebi rule seeking disclosure on the solvency position of listed entities to the shareholders saying that it will provide valuable information to the market. “In the past, disclosure of results provided information on the performance of a company but that could have come by taking an aggressive and risky position on the balance sheet,” said Dolphy D’Souza, a partner at Ernst & Young. “Now the investor will have a picture of the company’s performance and its liquidity and financial position also.”
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