The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

HSBC climbs up the risk curve

www.breakingviews.com

HSBC's $14 billion purchase of US consumer credit company Household International in 2002 was a cracking transaction. But given how big the UK banking group is, this was not a transformational deal in the way Royal Bank of Scotland's takeover of NatWest was. Two years on, investors are asking what HSBC might do for an encore.

Household is increasingly looking like an opportunistic one-off deal. HSBC snapped up Household for an attractive price when the target's rating was depressed. Initial scepticism about the deal quickly turned into euphoria as the market digested how little HSBC had paid.

But HSBC cannot dine off the deal for ever. It was always going to take a couple of years to integrate Household fully. Now the spotlight is on where HSBC goes from here.

One answer is more M&A. HSBC generates plenty of capital. Moreover it is also one of the two genuinely global banks. Only Citigroup has the same sort of capacity to buy just about any other bank.

Hungry again

HSBC appears to have regained its appetite for deals. It is considering the purchase of 49% of Korea First Bank for a proposed $3 billion.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree