HSBC How have the mighty fallen

[Dod101]

I was checking on CGT limits on the taxes Board yesterday in relation to my holding in HSBC. This morning I have been researching this holding which I first bought in 1991 and have held it, with many changes, ever since. Willie Purves, not yet Sir William, had recently taken over as Chairman and CEO and was well known to be a tough Scottish banker. That was just after it established its holding company as HSBC Holdings. Since then it had a 3 for 1 share split in 1999 and a 5 for 12 rights issue in 2009. Otherwise it is unchanged.

Taking account of the share split in 1999, I first bought shares at 70 pence per share on 24 September 1991 as I was sure that they would launch a bid to buy out Midland Bank ( they already held 14.9%) and if they did they would have to cxome under the jurisdiction of the Bank of England and disclose their hidden reserves, giving a boost to the share price. This duly happened. By September 1993, I sold some of my holding at £1.70 per share but I see I took scrip in lieu of dividends thereafter and continued to enjoy the uplift in the share price because by September 1995 I sold some more at £3.30. They continued upwards and I again sold some at £5.88 in April 1998.

My first wife died in January 2000 and I acquired more from her estate at a price of £7.70. That made a wonderful decade of growth of 11 times in well under 9 years. I should have sold out then because for the next decade, in fact almost ever since then, it has been a one way slide downwards. A new CEO took over in the shape of Sir John Bond and he embarked on a disastrous expansion over the next few years, with the takeover of Household, a sub prime lender in the US, Safra Holdings in Switzerland and many others, culminating in the financial crisis in 2008 and a rights issue the following year. The terms of the rights issue were 5 shares for 12 at a price of £2.54. I put in no new money but simply 'tail swallowed'.

My current records do not go further back than 2014 when the share price was around £6.50, less than it was 14 years earlier and a little more than it is today.

Dod

[monabri]

[align=][/align]Banks! If it is of any ''consolation'', they've done better than Lloyds! A positive return versus a disaster.



July 1993 to present.

[Dod101]

Thanks for that. I think they may be on the road to better things but it has been a lost decade or more, even if they are better than Lloyds. But they have had a lost decade or more when they should have been able to take advantage of the weakness of their UK rivals.

Half year results are due on 1 August (?)

Dod

[Lootman]

Investing in financials has not been a good strategy for what seems like at least 15 years now.

I hold only JP Morgan figuring it is the best of a bad lot. It has trebled in value since I bought it. Am really not tempted by any other bank - I just think there are better returns elsewhere.

I do hold Morgan Stanley but that is a rather different animal.

HSBC customer service is pretty bad as well, IMHO.

[Dod101]

Investing in financials has not been a good strategy for what seems like at least 15 years now.

I hold only JP Morgan figuring it is the best of a bad lot. It has trebled in value since I bought it. Am really not tempted by any other bank - I just think there are better returns elsewhere.

I do hold Morgan Stanley but that is a rather different animal.

HSBC customer service is pretty bad as well, IMHO.

In my experience HSBC's customer service is fine. I am a Premier customer and cannot say I have had any problems. I also take comfort from the fact that it always has been and remains amongst the best capitalised of all the major banks.

Dod

[1nvest]

Investing in financials has not been a good strategy for what seems like at least 15 years now.

I hold only JP Morgan figuring it is the best of a bad lot. It has trebled in value since I bought it. Am really not tempted by any other bank - I just think there are better returns elsewhere.

I do hold Morgan Stanley but that is a rather different animal.

HSBC customer service is pretty bad as well, IMHO.

In my experience HSBC's customer service is fine. I am a Premier customer and cannot say I have had any problems. I also take comfort from the fact that it always has been and remains amongst the best capitalised of all the major banks.

Dod

Been with them since Midland Bank days and recent/current customer service seems as good as ever to me. Self check-in/out machines (pay in/withdraw etc) units as you walk into my local branch, with a standing attendant present, and two sit down desks to the side that other staff come and help you at when needed. Sofa's for if you have to wait. I've always found the staff to be pleasant and helpful. Never had any issues with direct debits or other arrangements/transactions. When I travel abroad I phone up to say when and for how long and had no issues with overseas banking/withdrawals/spending either. Have had a couple of intercepted attempted fraud calls over the years i.e. they picked them up and blocked them (or rebated the amounts) pretty much automatically such that the calls were more just informational. In both cases the attempts were made relatively soon after having returned home from abroad i.e. my card/account number was obviously captured for potential fraud purposes whilst abroad.

[1nvest]

Banks! If it is of any ''consolation'', they've done better than Lloyds! A positive return versus a disaster.



July 1993 to present.

Lost around £30K in Lloyds shares over that sort of period, forget exactly when, but over the same period both Lloyds and Halifax services have tracked the the share price IME. Last time I went in to move a few £K from one account to another and I was in their for over a hour. Half a hour waiting, half a hour for the transaction to be made. Not as though it was even between two different banking groups, both accounts were with the same branch of Halifax (savings account to a card account from where monthly council tax payments are made).

In fairness the state has put a lot of pressure on banks to report any/all 'suspicious' transactions/actions, where they're not supposed to alert the individual, submit a report, wait for either clearance or timeout of no response in which case the transaction is considered as having been approved. I suspect that wait was part of that, i.e. rather than falling foul of requirements banks are doing the obvious of reporting all transactions, which is what the state also wants - so it gets to see all of our movements/actions/thoughts via cameras, phone movement tracking, internet activities and financial transactions. All under the guise of preventing money laundering, but where the money launderers are likely all too aware of methods that don't involve the more usual/regular transaction actions.

[BullDog]

Being a better investment than Lloyd's is setting an incredibly low bar. Banks are IMO pretty much uninvestable. I haven't held banking stocks for some time now and I don't intend to. HSBC included.

[bluedonkey]

I got out of HSBC at 640 within the last year. One less of my poor performing income shares. Waiting for a good exit point for the others.

My Lloyds holding has shrunk in value to the extent that it has become irrelevant to the portfolio performance.

[Dod101]

I got out of HSBC at 640 within the last year. One less of my poor performing income shares. Waiting for a good exit point for the others.

My Lloyds holding has shrunk in value to the extent that it has become irrelevant to the portfolio performance.

Hopefully (from my point of view) just at the wrong time. None of my in come shares have been what i would call good performers in the last year but (and I am not a HYPer) they are doing the job that I need which is to produce a good and growing income. Fortunately at my stage of life whilst I still like growth, income is more important. HSBC fills the bill and I think there is a decent prospect of growth in the share price.

What are you replacing them with? Presumably ITs?

Dod

[richfool]

I don't hold any bank shares directly, but I note Law Debenture IT has 3 banks in its top 10 holdings, - HSBC 2nd, Barclays and NatWest.

[bluedonkey]

I got out of HSBC at 640 within the last year. One less of my poor performing income shares. Waiting for a good exit point for the others.

My Lloyds holding has shrunk in value to the extent that it has become irrelevant to the portfolio performance.

Hopefully (from my point of view) just at the wrong time. None of my in come shares have been what i would call good performers in the last year but (and I am not a HYPer) they are doing the job that I need which is to produce a good and growing income. Fortunately at my stage of life whilst I still like growth, income is more important. HSBC fills the bill and I think there is a decent prospect of growth in the share price.

What are you replacing them with? Presumably ITs?

Dod

For the past several years, I have been moving the portfolio away from individual shares towards collectives. Collectives are now about 63% of portfolio value. At first, yes, it was ITs such as City of London, Witan, Murray International. Latterly it now tends to be simply ETF world trackers.

[Dod101]

Hopefully (from my point of view) just at the wrong time. None of my in come shares have been what i would call good performers in the last year but (and I am not a HYPer) they are doing the job that I need which is to produce a good and growing income. Fortunately at my stage of life whilst I still like growth, income is more important. HSBC fills the bill and I think there is a decent prospect of growth in the share price.

What are you replacing them with? Presumably ITs?

Dod

For the past several years, I have been moving the portfolio away from individual shares towards collectives. Collectives are now about 63% of portfolio value. At first, yes, it was ITs such as City of London, Witan, Murray International. Latterly it now tends to be simply ETF world trackers.

And have they given you a better outcome? Depends of course what the aims of the portfolio are. As I have said elsewhere I think, I am primarily looking for income these days and am (fortunately) less concerned about capital growth. My portfolio, although not constrained by what I see as the silly HYP rules, is certainly HYP like but gives me what i primarily need, which is a good and growing income. In that context, HSBC is doing the needful.

Dod