The days when HSBC was the low-payer of the Big Banking world have been left behind
Satisfactory in aggregate. Yes, it’s a fair guess that the officer class at HSBC took that view of their personal rewards last year. Some 192 of them earned £1m or more. Stuart Gulliver, chief executive, earned £7.2m or £6.6m or £4.2m depending on how one cuts the numbers – the differences being caused in part by the timing of the payment of deferred awards. Let’s just call it a lot.
But chairman Douglas Flint wasn’t talking about pay when he used the “satisfactory in aggregate” phrase. He meant the bank’s financial performance in 2011. Lucky old Gulliver, in other words, gets his many millions or so for a so-so, rather than a superb, outcome. The days when HSBC had a reputation as the low-payer of the Big Banking world have been left behind.
Are the HSBC executives worth it? Relative to other banks (a critical clause), a reasonable case can be made. HSBC boasted about the $27bn (£17bn) that has been paid to shareholders in dividends over the past four years. That’s not quite as impressive it seems since £12.5bn travelled in the opposite direction via 2009′s giant rights issue. But you know what they mean: HSBC, thanks to its leadership in Asia, is in a much healthier position than most of its peers. It is reckoned to fund as much as 9% of global bank-financed trade and being the bank of globalisation is still a useful place to be.
But stability is one thing. For HSBC to become an exciting investment, Gulliver’s attempt to make the bank a slicker and sharper firm (and not just one that pledges to avoid catastrophes like the 2003 purchase of US sub-prime lender Household) will have to bear fruit.
Progress is slow. At the key level, pre-tax profits for 2011 fell 6% to $17.7bn. A year ago, Gulliver set a target of a cost-to-income ratio of 48%-52% by the end of 2013. Last year, however, HSBC travelled away from the target, rather than closer to it – the ratio rose from 55.2% to 57.5%. Meeting the target on time is now regarded as “challenging”. The problem is not Gulliver’s enthusiasm for cost-cutting; it’s the sluggish growth in the income line, notwithstanding all that trade flowing between China and South America.
The market reacted by knocking HSBC’s share price back 4.5%, which was a reasonable response. Gulliver will continue to earn bonuses for many things – but early delivery of all his three-year targets will probably not be among them.
Posted by admin | Posted on 25-02-2012
Category : Business, Stocks
Tags: argues, ayn, charity, director, executive, independent, institute, reasonable, safety, social, substitute, youtube
The Ayn Rand Institute’s executive director argues that independent charity could be a reasonable substitute for government social safety nets.

See the original post here: Can Charity Replace Uncle Sam Safety Net?
Posted by admin | Posted on 16-02-2012
Category : Business
Tags: based, etf, etfs, gained, mid, month, november, price, reasonable, remarkable, seasoned, span
There are currently nearly 40 ETFs oriented to the financial sector. The following analysis features a reasonable list of ETF selections. We believe these constitute the best index-based offerings individuals and financial advisors may utilize.
ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth. Also included are some so-called “enhanced” indexes that attempt to achieve better performance through more active management of the index.
The financial sector has been at the epicenter of economic and stock market woes during the 2008-2011 (and perhaps beyond) periods owing primarily to the housing bubble bust and collapse of security products created to accommodate rising real estate prices. As investors know this collapse has led to ongoing bailouts and bankruptcies. The sector is on the mend to start 2012. It’s quite remarkable that from mid-November to mid-February 2012 (a three month span) many ETFs featured have gained as much as a stunning 50%.