HSBC weighs on banks as European stocks advance

HSBC was expected to release the bank's annual results later in the day on February 20. (AFP)
Updated 20 February 2018
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HSBC weighs on banks as European stocks advance

LONDON: European shares rose on Tuesday thanks to a slew of well-received results, though banks were a weak spot after HSBC reported weaker than expected earnings and said it needed as much as $7 billion of fresh capital.
The pan-regional STOXX 600 benchmark ended the session with a gain of 0.6 percent, while the banking index declined 0.1 percent.
A weaker euro also helped euro zone stocks make headway after a lacklustre start to the week.
HSBC dropped 3 percent after its trading update, the last under outgoing CEO Stuart Gulliver, who has pushed through a painful restructuring of Europe’s biggest bank by market value.
Credit Suisse analysts said HSBC’s pledge to undertake share buybacks “as and when appropriate” could mark a change in capital-return strategy by the new management.
Elsewhere, some positive earnings buoyed sentiment.
Edenred was among top performers, rising 6.5 percent after the French provider of prepaid meal vouchers and cards reported record 2017 earnings, increased its dividend and expressed confidence for 2018.
Danish software developer Simcorp led the STOXX index with a 12.2 percent rise after its full-year results.
Energy stocks supported indices, with BP, Total , Royal Dutch Shell and ENI up between 0.2 percent and 1.6 percent.
Among regional indexes, London’s FTSE 100 was flat, with the world’s biggest miner, BHP, joining HSBC among fallers as it dropped by 4.6 percent after missing results forecasts.
InterContinental Hotels fell 2.7 percent after putting shareholder payouts on ice as it pursues a new strategy to accelerate growth.
Swiss financial software company Temenos was 6 percent lower after news that it was in talks to buy British rival Fidessa Group for about 1.4 billion pounds.
Germany’s HeidelbergCement gained 0.3 percent after raising its target for savings resulting from the takeover of Italcementi for the third time in less than a year.


Former Irish bank chief jailed over crisis-era fraud

Updated 6 min 33 sec ago
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Former Irish bank chief jailed over crisis-era fraud

  • Judge Karen O’Connor stressed that Drumm was not being jailed for “the financial crisis,” instead “only for the two specific offenses for which he has been convicted.”
  • Anglo Irish Bank required a huge state bailout and was nationalized in 2009, contributing to an economic crisis in Ireland that later forced Dublin to seek an €85-billion-international rescue.

Dublin: A judge on Wednesday jailed a former head of Anglo Irish Bank for six years for carrying out fraud at the start of the world financial crisis a decade ago.
David Drumm, 51, had at an earlier hearing been found guilty of fraud and false accounting at the bank, whose rapid fall from grace epitomised Ireland’s own financial collapse.
Ahead of sentencing, the court on Wednesday heard from the defense that Drumm had acknowledged a “huge error in judgment” over the €7.2 billion fraud.
Judge Karen O’Connor, sitting at Dublin Circuit Criminal Court, stressed that Drumm was not being jailed for “the financial crisis,” instead “only for the two specific offenses for which he has been convicted.”
Drumm had been accused of transferring huge sums between Anglo Irish Bank and another financial institution, sometimes only for a few hours, to make the bank’s balance sheet look better than it was as the global financial crisis took hold.
Anglo Irish Bank required a huge state bailout and was nationalized in 2009, contributing to an economic crisis in Ireland that later forced Dublin to seek an €85-billion-international rescue.
Drumm moved to Boston in the United States shortly after the collapse of Anglo Irish Bank, but was later arrested there and extradited to Ireland to face trial.
Two of Drumm’s Anglo colleagues and the former head of Irish Life and Permanent — the other financial institution involved in the fraud — had already been jailed over the same conspiracy.
Passing sentence on Drumm, O’Connor took into account the five months he had already served in the US custody awaiting his return to Ireland.