HSBC, Barclays and StanChart jostle for US banking riches, unruffled by White House race
Tepid domestic demand spurs interest in US clients
UK banks offer gateway to key export markets
European banks hold just 7% of $429 bln revenue pool
By Lawrence White and Sinead Cruise
LONDON, Nov 1 (Reuters) -Britain's big global lenders HSBC HSBA.L, Barclays BARC.L and Standard Chartered STAN.L are vying to tap into a boom in U.S. commercial banking as corporate America seeks expertise for international expansion plans.
At stake is a growing pool of U.S. commercial banking revenues, which reached $429 billion in 2023 from $310 billion in 2019, helped by a strong U.S. economy and a boost to margins from higher interest rates, previously unreported data from consulting firm BCG showed.
European banks collectively share less than 7% of those revenues, but see good growth opportunities regardless of who wins the election on Nov. 5, driven by global trade flows.
"The East-West trade is really important for HSBC because of our very strong presence in Asia ... but actually for the UK, the main corridor in terms of business volumes is transatlantic," Stuart Tait, HSBC UK's head of commercial banking, told Reuters.
In the year to June 30, the value of payments made by HSBC UK's business clients to the U.S. rose by 15%, while transactions in the other direction rose by 5%, Tait said.
Rising merger and acquisition activity on either side of the Atlantic is one factor driving business. U.S. companies like the UK tech and R&D sectors in particular and UK valuations look relatively cheap, Tait said.
In the first six months of 2024, U.S. firms on HSBC's books acquiring UK businesses or creating new subsidiaries in the UK rose by 71% year on year,while UK-based clients doing the same in the reverse direction increased by 45%, HSBC data showed.
"Banks like HSBC can focus on 'trade corridors' with the U.S. for commercial banking clients and gain share," Amit Sukhija, a senior manager at BCG, said.
The push to expand in the U.S. comes after British banks such as HSBC scaled back in Europe in recent years, amid struggles to persuade domestic corporate clients in markets such as France and Germany to buy more of their services.
There have been challenges in HSBC and Standard Chartered's core Asian market too, with both lenders having incurred losses in China amid a crisis in the Chinese real estate market.
NEW ERA
The boom in U.S. business marks a more positive era after the British banks' chequered recent past, including HSBC's disastrous push into subprime mortgages just prior to the 2008 crisis.
HSBC and StanChart have also between them paid over $3 billion in U.S. fines over failings in anti-money laundering controls since 2012, while Barclays in 2022 agreed to a $361 million penalty over mis-selling of securities in the U.S.
The problems prompted the banks to prioritise corporate business over retail banking in the U.S.
Executives in London are coy on whether presidential candidates Republican Donald Trump or Democrat Kamala Harris would be better for their prospects.
"The question on policy will not just be decided by the presidential election, but what happens in the house, and what kinds of officials are put in, who can get confirmed, and you really won't know all of this until into the first quarter," Barclays CEO C.S. Venkatakrishnan told Reuters on a media call.
Barclays made 31% of its revenue in the U.S. in 2023 versus 25% in 2022 as its heavily U.S.-based trading business performed strongly and it grew revenue from its growing credit cards business.
The bank's third quarter results last week showed the increasing importance of the U.S. to Barclays.
It reported a 8.4% return on average allocated tangible equity, a measure of profitability, at its U.S. consumer banking division in the nine months to end-September, up from 5.7% a year earlier.
Barclays is hiring more sector experts to help win business from rivals, executives at the bank said last month.
It has also doubled U.S. dollar deposits at its New York branch in 2023 and again in the eight months to August this year, as it brings on board more corporate customers, its co-heads of investment banking said in the presentation to investors.
Emerging markets focused-Standard Chartered is leaning on its ties in its historical roots in Asia, Africa and the Middle East, to serve big U.S. corporates expanding in those regions.
Chief Financial Officer Diego De Giorgi told Reuters the bank also wants to grow its presence among U.S. financial firms as StanChart tries to hit a target disclosed on Oct. 30 of 60% of investment bank income from the sector, up from 49% in 2023.
"Many of our strong relationships... are in Europe and the United States, and we will continue to invest there with financial institution clients," he said.
Reporting by Sinead Cruise and Lawrence White; Editing by Tommy Reggiori Wilkes and Susan Fenton
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
