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HSBC Beats Expectation on 2020 Profit as It Shows Its Place of Belonging

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The company’s pretax profit was $8.78 billion in 2020, which is a 34% fall from the previous year. This beats the analyst expectation of an $8.33 billion pretax profit.

HSBC Holdings PLC (NYSE: HSBC), Europe’s largest bank by asset, in their report on the 2020 results disclosed that they have paid all dividends for the first time since the COVID-19 pandemic broke out. Not just that, HSBC has beaten analyst’s 2020 profit expectation.

The company’s pretax profit was $8.78 billion in 2020, which is a 34% fall from the previous year. This beats the analyst expectation of an $8.33 billion pretax profit. Its reported revenue was also down by 10% from the previous year with $54.43 billion in 2020.

Noel Quinn, the company’s group chief executive commenting on the report confirmed that the COVID-19 pandemic had a great impact on their yearly earnings.

“The shutdown of much of the global economy in the first half of the year caused a large rise in expected credit losses, and cuts in central bank interest rates reduced revenue in rate-sensitive business lines, ” he said.

HSBC Profit and Losses

The credit losses of the company increased to $8.8 billion from $6.1 billion in 2019. Also, as a measure of lending profitability, the Net Interest margin decreased from 1.58% in 2019 to 1.32% in 2020 according to the earning report. It was also reported that the common equity tier 1 ratio which was about 14.7% in 2019 rose to 15.9% in 2020. Just as said earlier, an interim dividend of 15% shares was announced, and according to the report, a new dividend policy has been introduced.

There is a consideration of share buy-back over time instead of the near future. The scrip dividend option will no longer be offered as the company has decided to pay all dividends in cash. HSBC further reported that there will be an interim payout at its half-year report in August as they have no intention of paying quarterly dividends in 2021.

On the reported earnings per share, there will be a 40% to 55% range of payout ratio from 2022 onwards according to HSBC. Currently, they aim to focus on Asia after declaring their plan on investing $6 billion over there coupled with focusing on their wealth and personal banking business.

The Question of Where HSBC Belongs

The question of where HSBC belongs has been intense since it moved its headquarters to London. Commercially, it is evident from its full-year results that Hong Kong is where the company belongs as it made two-third of its pretax profits from there. Compared to the performance of operations in other regions, Asia is their stronghold with HSBC moving their senior staff to the region.

Though the Hong Kong economy just like any other economy was affected by the global pandemic coupled with the channeling of its capital to China, it is expected that residents who have within their possession liquid assets of $1 million or more will enjoy a 12% increase over the next 5 years. HSBC can take advantage of Hong Kong’s financial future as they make the region their new home.

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Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.



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GameStop (GME) Surges by Over 50% Now amid C-suite Shake-Up

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GameStock (GME) stock has started its way higher again, gaining over 100% yesterday.

GameStop Corp (NYSE: GME) saw its share price surging by 103% on Wednesday as investors reacted positively to the resignation of the financial chief officer of the company. The shares also took another 83% surge in the after-hours trade of Wednesday according to the available data. The investors proceeded to push the price of the premarket trade on Thursday with a 44% surge. As the trading is going on today, GME stock is rising by 51% now.

It is said that investors and traders are hoping for a resurgence amid the expected resignation of the financial Chief Officer Jim Bell. It was disclosed that the decision was forced by the board and Ryan Cohen, a GameStop Corp investor and the co-founder of Chewy, an online pet and food retailer. This is expected to be done on March 26.

In a filing with the Securities and Exchange Commission (SEC), the company denied all allegations of forcing Bell out due to a disagreement on something related to the company’s operation. They stated emphatically that the resignation has nothing to do with contention relating to GameStop’s policies, operation, or practices which include accounting principles and practices. This is contrary to the reports that Cohen spearheaded an attack to get him out of the company to execute the transition online.

Cohen owns over 12% of the stocks of GameStop Corp through his company RC Ventures. Somewhere in November 2020, Cohen allegedly wrote a letter to the board of GameStop criticizing the executive team to force them to build a perfect e-commerce platform. In the letter, he stated that GameStop (GME) needs to evolve into a technological company that delights investors. Not just that, it should also deliver a top-notch digital experience instead of priding itself in being just a video retailer that only focuses on a brick-and-mortar footprint. Bell was the first casualty of Cohen’s leadership shakeup.

Jeffery Equity Thinks Bell Have No Issue with GameStop (GME)

Jefferies Equity analyst, Stephanie Wissink in a statement to the client’s acknowledged the effort of Bell during his tenure in the administrative setup of the company. It can be recalled that there was a sharp fall in sales during the late stages of the final hardware cycles. During that period, Mr. Bell led a series of actions that helped to protect the GME equity.

Wissink believes that the expected resignation of Bell was mutual, none Immediate, and not a product of misunderstandings or disagreement between him and the board as activist settlement mostly follows leadership changes. It was also disclosed that instead of looking for a CFO replacement with a retail background, the company will consider someone with a tech background as their primary focus is on e-commerce growth.

Bell refused to comment on the reports of his resignation. Currently, the company has consulted an executive search firm to find a Financial Chief who has the ability and the qualification to drive the company to its expected transformation.

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Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.



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Nash: Bridging Gap between Fiat and Crypto

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Nash Link is a solution for merchants to accept cryptocurrency without setting up a blockchain wallet.

Nash specializes in providing the best fiat/crypto gateway services for both retail and business customers, combining the lowest prices and fees with high-security wallets. This exchange service is fully licensed to operate in Europe.

For BTC, ETH, NEO and USDC, Nash offers 0% fees. This is possible because Nash operates its own crypto-crypto exchange. Nash’s unique Layer-2 exchange provides the same performance as centralized exchanges without taking custody of funds.

For other crypto assets, tradeable on Layer 1 user wallets, Nash charges just 1% fees, with no hidden slippage fees.

What’s more, Nash provides the safest software wallet by using secure multi-party computation (MPC) technology. MPC ensures a user’s full private key is never used to sign transactions and allows for security policies like address whitelists. Nash never has control over user funds.

On the business side, Nash offers its fiat gateway services as a white-label solution for third parties. Fees remain as low as 1%, with no tricks like huge asset mark-ups. Nash is a highly competitive solution for projects seeking a licensed fiat gateway for their platform and token.

Nash Link is a solution for merchants to accept cryptocurrency without setting up a blockchain wallet. Nash pays merchants the exact fiat price they set in their preferred national currency (€, £ or $) with 0% fees, managing risk around price volatility This is also possible thanks to Nash’s Layer-2 exchange.

In 2021, Nash will expand into digital banking services. High-interest DeFi-staking products will go live in Q2. In Q3, Nash will offer national currency checking accounts (with IBANs) on its platform. These will enable an even simpler savings product where users can easily deposit cash and lock it in a DeFi-powered crypto savings account. With a debit card arriving in Q4, Nash will seamlessly integrate traditional and crypto finance by the end of the year.

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Please check out latest news, expert comments and industry insights from Coinspeaker’s contributors.



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Fed Chairman Jerome Powell Said They Would ‘Engage with Public’ on Digital Dollar

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The Federal Reserve chairman said that they would opt for a public-centric approach on cryptocurrencies, however, would proceed with the digital dollar developments only after weighing the risks it poses to the US financial system.

While the CBDC developments across the world are catching up with the pace, everyone is closely monitoring any developments coming from the US. On Wednesday, February 24, disclosed additional details about their plans on the digital dollar. Speaking before the House Committee on Financial Services, Jerome Powell said that the US Federal Reserve would further “engage with the public” on the digital dollar this year. This is for the first time that Powell has given an official timeline for America’s CBDC developments.

Talking about the digital dollar project, Powell said:

“This is going to be an important year. This is going to be the year that we engage with the public pretty actively including some public events that we are working on, which I’m not going to announce today.”

Powell on Digital Dollar

Instead of taking upfront decisions and going to the public, Powell said the Fed would take an alternative approach. Rather, the Fed will directly talk to American citizens regarding the tradeoffs associated with the digital dollar project. Powell said:

“There are both policy questions and technical questions that relate between those two and they’re very challenging questions. We’re going to have a public dialogue … in the meantime we’re working on technical challenges and also collaborating and sharing work with other central banks around the world.”

However, Powell also maintains a cautious stand simultaneously. He stated that things will proceed further only after analyzing the risks to the stability of the US financial system. He also added that the digital dollar design should not “undermine … healthy market function.”

India Working on Its CBDC Project

On Wednesday, India’s central bank governor Shaktikanta Das said that the RBI has started its procedural developments to launch its digital currency in the country soon. “While we cannot guess the date of its launch, it is receiving our full attention,” he said.

However, Das has raised concerns that the use of public cryptocurrencies can undermine the country’s financial stability. The views of India’s monetary authority have been fundamentally opposed to the use of digital currencies. there have also been reports of introducing a ban for crypto use in India.

However, Das added that the Indian central bank is not opposed to the blockchain framework, the underpinning technology for cryptocurrencies. Instead, he added that they will leverage the blockchain’s benefits.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.



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