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France 24
30-07-2025
- Business
- France 24
HSBC banks lower profits on higher costs
Profit after tax dropped by one third to $12.4 billion compared with the first six months of 2024, hit by restructuring costs and an impairment on its stake in a Chinese lender. The London-headquartered bank is months into a shakeup aimed at simplifying the group's structure and delivering $1.5 billion in annual cost savings in 2027. It comes as the bank sector faces volatile trading as a result of US President Donald Trump's tariffs onslaught. "We have delivered these results in an ongoing period of uncertainty," chief executive Georges Elhedery said in call with reporters Wednesday. "It has become increasingly important to simplify the organisation and make it more agile," he added. The bank recorded a $2.1 billion impairment linked to its stake in China's Bank of Communications, which was recapitalised by the country's finance ministry this year. HSBC last year reported a $3 billion charge on the value of its stake in the Chinese lender, which was hit by property loan writeoffs. Elhedery said that HSBC is "making positive progress" in its structural overhaul, which began in October, shortly after he became chief executive. Operating expenses increased four percent, which the bank partly attributed to restructuring and related costs. The bank generates most of its revenue in Asia and has spent several years pivoting to the region, vowing to develop its wealth business and target fast-growing markets. HSBC shares fell around 2.5 percent in morning deals on London's top-tier FTSE 100 index despite a dividend payment and plans to repurchase up to $3 billion of shares. Missed expectations Elhedery said HSBC is "well positioned to manage the changes and uncertainties prevalent within the global environment in which we operate, including in relation to tariffs". He noted that a "broader macroeconomic deterioration" could impact returns in future years. Profit before tax fell more than 26 percent to $15.8 billion, falling short of analyst expectations. First-half revenue declined nine percent to $34.1 billion. "Repositioning HSBC is not a simple task given its size and scale," said Russ Mould, investment director at AJ Bell. "There are also challenges in its priority regions such as property market weakness in Hong Kong and mainland China. "It means investors must continue to brace themselves for setbacks in its results well into 2026," he added. In Hong Kong, HSBC shares in were down 3.8 percent at the close. Morningstar senior equity analyst Michael Makdad said the bank "needs to make sure that shareholders in Asia remain on board with the strategic direction... centred on simplification and intensive cost-cutting, but without a radical overhaul of the entire business model". Makdad added that its immediate challenge is to find a replacement for board chairman Mark Tucker, who will retire by the end of 2025 after eight years helping to steer Europe's largest bank.
Reuters
18-06-2025
- Automotive
- Reuters
Some Chinese banks vow to rein in commissions given to car dealers for auto loans
BEIJING, June 18 (Reuters) - Banks in China's Henan province said on Tuesday they will stop giving car dealers high commissions for auto loans taken out by buyers - a move that comes amid increased regulatory scrutiny of the sector. Chinese authorities have been keen to curb a deepening price war in the car industry and what they see as excessive competition among automakers. According to industry sources, some Chinese banks offer car dealers high commissions to lure borrowers and the dealers then use that money to provide discounts to car buyers, stimulating sales. The sources were not authorised to speak to media and declined to be identified. China Everbright Bank's ( opens new tab Zhengzhou branch, Henan Rural Commercial Bank and Bank of Communications' ( opens new tab Henan branch also said in statements that they will prevent car dealers from making it compulsory for customers to take out a car loan. The practice increases borrowing costs for consumers and ultimately harms the interests of both consumers and financial institutions, the lenders said. The banks added that interest rates on car loans should be no more than 6%. Until recently, the price war that began in early 2023 had shown little sign of abating, and tensions have been running high with some auto executives questioning the health of the sector. China's industry ministry summoned automakers to a meeting this month where they were told rein in the price war and excessive practices that have hurt the industry's supply chain. Since then, automakers have pledged to make payments to suppliers in 60 days, responding to an outcry from steelmakers over long payment times. Chinese auto dealers have also complained, calling on automakers to stop offloading too many cars on dealerships, saying the intense price war was damaging their cash flow, driving down their profitability and forcing some to shut.
