Corporate Debt Restructuring Masterclass

18 July 2022 (Mon), 5pm Singapore/HK time

HSBC reported solid results with Q1 adjusted profit before taxes more than doubling to $6.4bn and net profits up 82% to $4.6bn. All regions were profitable in the quarter, with HSBC particularly mentioning ‘HSBC UK Bank plc’ reporting pre-tax profits of over $1bn. Profits were boosted by a release of $400mn of loan loss reserves as compared to a $3bn charge in 1Q2020. They noted that revenues fell 5% to $13bn ‘due to the impact of 2020 interest rate reductions in all global businesses’ as net interest margins (NIM) were down 33bp to 1.21% from 1Q2020. CET1 ratio stood at 15.9%, unchanged from end-2020.

HSBC’s dollar bonds were stable – its 4.6% Perp was at 101.3, yielding 4.4%.

UBS reported profit before taxes of $2.3bn, up 14% YoY. Profits rose across all divisions except investment banking which fell 42% while its large wealth management business saw profits rise 16% to $1.4bn. UBS said it fully unwound its exposure to Archegos adding that the “default by a US-based client of our prime brokerage business resulted in an impact on net profit attributable to shareholders of $434mn”. It added “IB’s results included a USD 774m loss related to a default by a US-based client of our prime brokerage business.
Global Markets revenue decreased by 27% or USD 554m, driven by the aforementioned loss”. CET1 ratio stood at 14% vs. guidance of 13%. The bank said it repurchased $1.1bn of shares YTD and will resume repurchasing shares shortly.

UBS’s dollar bonds were flat – its 5% Perp was at 101.8, yielding 3.94%.

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