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Home » Daily Briefing » Daily briefing - 04 May 2017

Daily briefing - 04 May 2017

Morning Briefing

Another day brings with it word that another bank has outstripped analyst predictions for its latest quarterly results. Now it is the turn of the largest bank in Europe: HSBC. Despite the fact that profit before tax fell by 19 percent from a year ago, the perception of having done better than prophesied ($5 billion rather than the $4.31 billion expected) sent shares up in London and Hong Kong. "Our pivot to Asia continues," said chief executive Stuart Gulliver, "We increased advances to customers and grew mortgages and business lending". Having restructured, closed branches and increased spending on the fight against financial crime, the firm argues that it is now "on track to hit the higher cost-saving target we announced at our annual results".

The apparent misjudgments of Jes Staley in recent times, as described in yesterday's Briefing, are increasing pressure to speed his removal as CEO of Barclays. "Things are not looking good for him," Michael Lafferty told Share Radio earlier this morning. "To have pursued the whistleblower is such a serious matter. It is not only raising questions about Staley, it also raises questions about the Barclays board." The interview, though brief, ranges wide, touching on German, Italian, Spanish, North American, Japanese and Chinese banking trends. "Focus is the key thing," is the conclusion. The audio can be streamed from your browser.

Rival firm Standard Chartered has meanwhile plumped for Frankfurt as its new hub in the European Union, in news revealed by chairman José Viñals at the bank's annual general meeting. With the UK's status in the Single Market uncertain, EU-based subsidiaries are now the order of the day, with the only question being which city suits a firm best. StanChart, first among its London peers to come out for Frankfurt, is currently in talks with regulators about its plans.

Also coming out of Frankfurt today is news that Institutional Shareholder Services (ISS), a shareholder advisory company that places proxy votes, is advocating for an audit, independently sourced, into Deutsche Bank's management and supervisory board response as the bank dealt with recent scandals ranging, as readers will recall, from money-laundering Russian trades to Libor manipulation. Meanwhile neighbouring giant Credit Suisse has paid $400 million as part of a settlement stemming from claims in the United States that it sold mortgage securities that proved toxic for a trio of federal credit unions.

Reminders of these scandals makes it all the more à propos that the Banking Standards Board in London has posted online transcripts and other materials (in PDF form) from its event the month before last on law, ethics and culture in banking, a gathering centred on the question "Worthy of Trust?". These materials are well worth meditating upon, and not just for better compliance: time and again we have seen a compromised culture mar the contribution of a bank whose stakeholders deserved much better.

Puerto Rico files for bankruptcy
BBVA acquires Mexican payments startup Openpay
Indians moving away from gold and into bank products, says prominent banker
Foreign banks in UK to follow new rules on whistleblowers [FT paywall]

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