HK Analyst Report Says HSBC Needs $111 Billion Capital Injection

HSBC, one of the world’s biggest banks, has “glaring problems” and may need to plug a $111 billion capital gap, a controversial new report claims.

Two analysts for Forensic Asia, a recently launched boutique Hong Kong research firm, have heavily criticized the bank for “overstated earnings, inadequately capitalized balance sheets, legal and regulatory problems” in a research note this week.

HSBC is generally viewed as one of the U.K.’s best-placed banks, and came through the financial crisis without having to raise extra capital, thanks in large part to the global scale of its operations. It had a tier 1 capital ratio – a key measure of financial health – of 13.3 percent at the end of the third quarter of 2013 – far above the 4 percent required by international regulators.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza