To be fair, the markets had other things on their minds – Asian indices tumbling, US bond yields hitting new depths, and renewed cries of anguish over the credit squeeze. HSBC’s as-expected results were par for the course.
And there was some good news too from the bank. Stephen Green, the Chairman, confirmed the strategic refocus of its operations – essentially, away from Europe and north America, and into the still-dynamic economies of Asia and Latin America. So pulling out of French retail banking and investing in Korea [if the authorities allow] were positive developments.
More significant were the changes of board personnel that will see through these strategic shifts. Again, it is a case of out with the old, and in with the new – a rather crusty layer of great-and-good are to be replaced with luminaries from Asian industry and finance.
The big question mark still hangs over the American sub-prime mortgage operations. US activist investors have given Green a list of options about selling or ring-fencing this business, but it seems to me all the alternatives are flawed in this market. US sub-prime is still so toxic that it will probably have to be buried in the ground for some time before it can be safely disposed of.
The American shareholder disquiet also raises an interesting point in the current debate over sovereign wealth funds. Compare the rabble-rousing of Knight Vinke with the quiet, supportive loyalty of HSBC’s Middle East investors.
Bad, but it could have been so much worse for HSBC