Monday, November 4, 2019
HSBC faces challenges, Europe stocks slump
As Europe's largest lender, HSBC plays a crucial role in financial markets. Recently, their profits fell by 12%, key targets were missed, and stocks plummeted. A fair share of the turmoil and revenue problems come from the Asian markets, especially in light of the political protests in Hong Kong. Most of their money is made in the Greater China region and they are exposed to the problems in the region, which are currently centered around the protests. Hong Kong in particular is a key driver in revenue. Their shares were down by 2.1%. Some of the measures being considered are exit stock trading in some of the Western markets, selling their french retail bank. The political situation is projected to worsen in Hong Kong and HSBC needs to take steps to to protect their profits and credit having such deep ties economically to the financial markets there.
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If HSBC continues to perform poorly, what will the ramifications be for European lending? Are they big enough to bring down the system with them? Or will other banks take advantage of this feeble position to take a greater share of the market? Very interesting position they are put in at the moment.
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