Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

HSBC shares fall to 25-year low as fears for China business grow

HSBC shares fall to 25-year low as fears for China business grow

HSBC's shares plunged to historic lows on Monday as the bank was hit by new fears about its business in China and a report accusing it and other major lenders of failing to stop criminals from moving dirty money around the world.

The stock closed down more than 5% in Hong Kong at its lowest level since 1995, according to data provider Refinitiv. The pain continued in London, where the bank's shares were last trading down 6% at another multi-decade low.

This has already been a terrible year for HSBC's shareholders as the bank grapples with a global recession, plunging profits, US-China tensions and a political firestorm in Hong Kong.

But the bank was slapped with even more bad news this weekend, with Chinese state media suggesting that it could be included on a list of companies which could face restrictions on doing business in China.

"It isn't good," said Stephen Innes, chief global market strategist at AxiCorp. "Fear of the unknown is what triggers investors to cut and run."


Trouble in China

HSBC's woes in China have been well documented. The London-based lender traces its roots to Hong Kong and has carved out a lucrative role in global banking for decades by straddling East and West. Asia delivered more than 80% of HSBC's profits last year.

But tensions between Beijing and the West have made HSBC a popular punching bag in Chinese state media, and the bank has long been floated as a potential candidate for a list of "unreliable" entities that Beijing could sanction.

On Saturday, investors were given another reason to worry about China when the country's Commerce Ministry laid out for the first time how that long-rumored list would work.

Any business placed on the so-called "unreliable entity list" could be restricted from investing in China, participating in Chinese imports or exports, or having its staff enter the country, the ministry said in a statement.

The ministry did not say which companies are on that list. But HSBC's possible inclusion was once again mentioned this weekend by the Chinese state-run tabloid Global Times, which also cited several American companies as possible targets.

HSBC has warned investors about the potential consequences from worsening US-China relations. CEO Noel Quinn said last month that the tensions "inevitably create challenging situations for an organization with HSBC's footprint."

And in July, the bank denied longstanding accusations from Chinese state media that it "framed" Huawei to help the US government. (The Chinese tech firm is in a tense legal battle with the United States, and a Canadian court is considering whether to extradite Huawei's CFO to stand trial in the United States.)

Further action from China may not be imminent, though. The Global Times also said that "there was no timetable or specific companies earmarked for the list," citing an official at China's Commerce Ministry. Instead, the message was meant to show that "China is sending a stern warning," according to the publication.

Innes said the move reminded investors of the bank's vulnerabilities. "If they can't do business in China, it's going to be a tremendous hit to both top and bottom lines," he told CNN Business.


Suspicious activity

Adding to HSBC's problems, BuzzFeed reported on Sunday that some of the world's biggest banks, including HSBC, "continued to move money for suspected criminals" despite documented concerns about certain transactions.

The publication said it had investigated more than 2,100 suspicious activity reports (SARs) compiled by the US Treasury Department's Financial Crimes Enforcement Network, which is known as "Fincen," to support its claims.

BuzzFeed said it shared the documents with the International Consortium of Investigative Journalists, an organization that has published other investigations involving suspicious financial activity, such as the Panama Papers and the Paradise Papers. CNN Business has not independently verified any of the Fincen documents.

In a statement Monday, HSBC said that it would "not comment on suspicious activity reporting."

It defended its efforts to "combat financial crime," saying that it had worked with a third-party monitor to overhaul its practices starting in 2012. It added that the bank is a "much safer institution" than it was back then.

In December 2012, HSBC agreed with US regulators to pay $1.9 billion to resolve money-laundering allegations. The Department of Justice and US Treasury said then that HSBC had allowed the most notorious international drug cartels to launder billions of dollars across borders.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
×