Why is no-one talking about HSBC?

sabretoothtigger

Its like a credit card, if you only ever pay off the interest you end up on a debt treadmill, getting tired going nowhere.

Just that extra effort means you are reducing the actual amount borrowed which has a compound effect on interest owed and can leave it all behind sooner, definitely worth it seems to me


Other points of view worth mentioning are, the debt is cheap so why reduce it. Put it into other ventures which will do better then you are charged with rates so low now.
If you know stoozing, then you know this gamble I guess

Also another well made point here previously was dont just reduce the debt, make sure you have 12 months of payments back logged ready to feed into mortgage should the worst happen.
Just reducing the mortgage early, overpaying doesnt nessecarily earn any good will later if you cant pay the monthly

MyLastFiver

I heard the other day (possibly Peston) that HSBC are regulated according to Hong Kong regulations, which has stricter rules on speculation that the UK. This means that HSBC had less exposure to risky assets than the UK banks.

Andrew64

Because of the nature of my work, I have HSBC accounts both here and in Malaysia. HSBC in Britain was more careful than the other banks, but that doesn't compare with how careful HSBC has been in Malaysia. In Malaysia (and South-East/East Asia generally, I understand) banks are not allowed to offer 90%+ mortgages, they are not allowed to get involved in strange derivatives. So even if HSBC is weak in one part of the world, it would be offset by it's strength in another.

omelette451

sabretoothtigger wrote: »

Other points of view worth mentioning are, the debt is cheap so why reduce it. Put it into other ventures which will do better then you are charged with rates so low now.
If you know stoozing, then you know this gamble I guess

This depends on the Ts&Cs of the mortgage. Some allow annual overpayments, but some take them monthly. In other words, if you can overpay by, say, £500 per month, waiting till the end of the year and trying to pay in £6000 may mean you have to pay extra charges if they worked in months rather than years.

flissh

Andrew64 wrote: »

Because of the nature of my work, I have HSBC accounts both here and in Malaysia. HSBC in Britain was more careful than the other banks, but that doesn't compare with how careful HSBC has been in Malaysia. In Malaysia (and South-East/East Asia generally, I understand) banks are not allowed to offer 90%+ mortgages, they are not allowed to get involved in strange derivatives. So even if HSBC is weak in one part of the world, it would be offset by it's strength in another.

Think I'm right in saying HSBC can't even lend at all in mainland China, to Chinese nationals.

We have HSBC acc in HongKong rather than Mainland China, as can't even have a credit card otherwise.

RichardDJ

Bump

Thanks all, nice to see/read a good discussion instead of the doom-filled rants that plague these forums

Adebisi

michaels wrote: »

I'm not surprised they are doing ok - they have taken the opportunity of the crunch to become much less competitive - their svr used to track 1.25% above the BOE base rate, now it is 2.94% whereas their savings rates have tracked the base rate down. Not having to take Govt money (except for the special liquidity scheme?) has allowed them to thumb their nose at the Govt and not pass on the interest rate cuts to their borrowers, compare this to LTSB who have little choice and Nationwide who take a line fair to their customers rather than just the shareholders...

Still all is not as rosy as was thought a few months ago - initially their large exposure to the emerging markets of the far east was seen as an advantage and a cushion against any US and UK loses. This allowed them to present themselves as a safe haven for funds and hoover up deposits at low rates - now it is not so certain that the Far East won't be hit just as hard, hence the halving of their share price.

My HSBC SVR tracks to 1% above the BOE???? Which is very nice of them being 'the listening bank' and all!!

matbe

Adebisi wrote: »

My HSBC SVR tracks to 1% above the BOE???? Which is very nice of them being 'the listening bank' and all!!

They may be the listening bank,but they are not the listening charity, they still need to at least break even and possibly even make a profit.


If more banks had made a profit we would'nt be in this goddamn mess.


You cant blame a bank for being sensible.

When will people learn banks are there to make money not friends.

Jonbvn

Adebisi wrote: »

My HSBC SVR tracks to 1% above the BOE????

Well our mtg is tracking BoE+0.79%!!!

It is clear that given the attitudes to saving in the Far East, where HSBC are big, they have been somewhat protected. Given the huge downturn in exports from China et al, it remains to be seen if this will last. However, if the do struggle, I think they may be to big for the UK gov't to bail out.:eek:

The health of HSBC should be seen as a good bell-weather.

bubblesmoney

HSBC in other places like india is very selective in its client base. in india they require a minimum of approx 350£ min balance in the account at all times if not people incur charges, this has been the case for the last 6y and more. people incur charges for more than 2 cash transactions per month at the branch. internet transactions are free. even here in the uk if my balance falls below 350£ there are no charges but in india there is. i didnt bother jumping thru the hsbc-india hoops even though am a hsbc customer here as was just curious when asking about their requirements in india and didnt really need their account then. their risk taking is seemingly less than other banks who operate in india (which are conservative banks anyway). they seemed to be doing well is what i gathered in some informal discussions with a hsbc board member a while ago.

banks in asia will have access to higher savings from public as average savings are upto 25% of salary, might be higher in the customers the banks like hsbc-india cherry picks. but interest rates are higher in india and pound is losing strength against other currencies, so even if they have good deposits elsewhere in asia and shortfalls in uk, they wont be stupid to raise deposits in asia giving higher interest and fund loans in uk at lesser interest plus additional currency risks.

hsbc units in different countries are compartmentalised. hsbc uk follows uk rules and hsbc-india follows indian rules which i gather are more stringent. in the uk in some places hsbc-india has some branches which provides facilities for non-resident indians. but these accounts can be linked with hsbc-uk accounts, funds transfer is easier and fee free. but each bank is exclusive and the uk and india operations are different with each unit having no access to the other ones accounts. a lot of back office IT functions for most of the hsbc units across the world are based in many cities in india (and some in brazil, china and probably malaysia as well i think). they seem to have some centralised management training for senior management in hong kong. so even though the units are delinked but they still have some flexibilty in cutting costs and management training etc to maximise profits across all units.