Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

February 21, 2016 | Europe’s Largest Bank, HSBC, Posts Surprise $858 Million Loss: Analysts Expected Profit of $1.95 Billion

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Negative earnings “surprises” are like the Energizer Bunny. They run on, and on, and on. Yet, somehow economists and analysis are surprised by the obvious. Here is a prime case in point: HSBC Posts Surprise Fourth-Quarter Pretax Loss of $858 Million.

HSBC Holdings Plc, Europe’s largest bank, reported a surprise fourth-quarter pretax loss of $858 million.

The loss, announced by the London-based bank in a Hong Kong exchange statement on Monday, compared with the $1.95 billion profit forecast by the average of five analysts in a Bloomberg survey. Operating costs in the period amounted to $11.5 billion.

HSBC Chief Executive Officer Stuart Gulliver, 56, has been accelerating plans to scale back the lender’s vast global footprint, seeking to boost profitability and reverse a share slump this year. In June, the CEO unveiled a new strategy to boost investment in Asia, exit unprofitable countries and cut as many as 25,000 jobs to help save as much as $5 billion by the end of 2017.

HSBC Weekly Chart

HSBC

Fancy that. It seems the stock market expected this surprise was coming long ago.

The market is expecting lots more banking surprises. Here is one of them.

Deutsche Bank Weekly

DB

Expect more surprise so you won’t be surprised when the analysts are.

Mike “Mish” Shedlock

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

February 21st, 2016

Posted In: Mish Talk

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.