Why There’s More Bad News to Come From the Banks
Aug 5th, 2008 | By David Stevenson | Category: International InvestingThe British bank reporting season is now in full flow. It’s the time of year for all those lenders, who’ve been happily turning down all your pleas for that extra loan or higher overdraft, to admit to all the cash they have managed to mislay over the last six months.
And the picture that’s emerging isn’t very pretty. Not only have the numbers so far been worse than expected, there seems no end in sight to the sorry tales of credit write-down losses. It looks like there’s a shedload of more bad news on the way.
Today it was the turn of HSBC to face the music, and it duly coughed up another telephone number credit write-down. Last week, Lloyds TSB and HBOS turned in the sort of results that would have been seen as quite unthinkable until recently. Another round of write-offs, totalling a combined £1.7bn, blitzed the income statements and slashed profits by more than 50%.
But HSBC has just unveiled write-downs three times as large. The bank, which reports in US dollars, has set aside another $10.1bn (£5.1bn) this year for its ‘loan-loss reserves’, i.e. a charge against the bank’s capital to allow for losses on assets that have gone bad.
Source: Why There’s More Bad News to Come From the Banks
Advertisement
One of our analysts has discovered a pretty amazing phenomenon in the markets:
It's a "pocket of inefficiency" that allows you to intercept (and trade on) the news -- BEFORE it appears in the Wall Street Journal, the Financial Times and Bloomberg...
Sounds crazy, I know.
This gentleman has even used it himself to generate returns as high as 425%. What's the next story he'll intercept?
here is the link:
David Stevenson joined MoneyWeek as Associate Editor in May 2008. Having started a career in the City with Morgan Grenfell, David joined Oppenheimer as a fund manager in 1983, starting on the UK desk before managing the European fund in 1986. He has subsequently managed equity portfolios for Hill Samuel, Cigna and Lloyds TSB subsidiary IAI International, and has worked as an analyst for stockbroker BNP Securities. After a brief period running his own business, David then returned to the financial world in 2007 as investment writer for the Motley Fool.