HSBC prepares for Brexit, ECB bond programme pays off

HSBC suffered a shareholders revolt in 2015 as they questioned its Swiss banking arm performance and the composition of its board. [Red Fish Images/ Shutterstock]

British multinational bank HSBC could transfer 1,000 of its employees from London to Paris within the next two years. Meanwhile, the European Central Bank’s bond-buying programmes continue to impress. EURACTIV’s partner Milano Finanza reports.

HSBC reported fourth quarter net losses of $4.23 billion, quadruple the figure for the same period in 2015. Its total profit for 2016 was $1.3 billion, down from $12.6 billion in 2015.

The group has also launched a share buy-back programme worth $1 billion, with a final dividend of 21 cents a share.

Now it has been revealed that the bank could transfer at least 1,000 of its employees to Paris, according to Dow Jones Newswires. There are fears that London could lose its lucrative passporting rights after Brexit and money houses are already starting to think of contingency plans.

HSBC is currently headquartered in London and is the world’s sixth largest bank by assets held.

Paris pulls out all the stops in effort to poach London's financial sector

The French government is bending over backwards with promises of tax cuts, in order to present Paris and the eurozone as a safe haven from the uncertainty of Brexit, and the risk of economic depression in the United Kingdom. EURACTIV France reports.

The proceeds from the European Central Bank’s quantitative easing (QE) programme increased by two-thirds last year, totalling €435 billion. Profit redistribution to the eurozone countries has already begun.

The ECB closed 2016 with a net profit of €1.19 billion, up from 2015’s final total of €1.08 billion, mainly driven by increased interest rate revenues from government bonds purchased through the QE scheme.

The programme will continue to be funded with €80 billion a month until the end of March, when it will be scaled back to €60 billion.

The ECB redistributes its net profit to the eurozone countries through their individual central banks. The Frankfurt bank said on 31 January that it had already made an interim deposit of €996 million and that it would make a second payment of €227 million on 17 February.

But the ECB’s golden goose remains the Securities Markets Programme, a bond-buying programme that was launched at the height of the sovereign debt crisis. Despite being shelved in 2012, the institution continues to keep the bonds it bought in its portfolio and last year pocketed income worth €520 million.

Schäuble denies 'Grexit' threat, says Greece on right path

German Finance Minister Wolfgang Schäuble denied yesterday (19 February) that he had said Greece would have to leave the eurozone if it failed to implement economic reforms.