SaxoTV

Is HSBC's exposure to China a concern?

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February 24, 2014 asia, banking, banking and emerging markets, banking and finance, banking industry, banks, china, china slowdown, emerging markets, equities, equity, financial institutions, goldman sachs, hsbc, hsbc earnings, hsbc profits, hsbc results, investing, investment, lea jakobiak, morgan stanley, morgan stanley and emerging markets, peter garnry, saxo bank, saxo tv, standard chartered, ubs, ubs and china, us banks, vitigroup

As HSBC misses market expectations and reports a pre-tax profit of USD 22.6bn for 2013, Saxo Bank’s Peter Garnry explains that one of the reasons is HSBC's exposure to emerging markets. He also adds that "their cost controls are not that good". 

But Peter does add that having a large exposure to China, and Asia in general, needn’t worry investors too much: "I have said multiple times that I’m still positive on emerging markets and Asia in particular. The fundamentals are still pointing long term to above average growth rates, at least higher than what we see in Europe and the US."

Besides HSBC, Peter explains that UBS and Standard Chartered are the top two European banks with significant exposure to china. And in the US, the three banks with the biggest exposure are Citigroup, Morgan Stanley and Goldman Sachs.