In the Doldrums: HSBC’s FinTech Strategy Fails to Impress Investors

HSBC logo on its London office

It’s been 24 hours since HSBC issued a statementFMhat provided an update onFMhe bank’s strategic plans forFMhe near future and investors don’t seem impressed. The company’s share price has hardly budged sinceFMhis Monday’s announcement as it continuesFMo hover aroundFMhe 733 pence mark.

The new strategy will see Europe’s largest bank investing $15 – 17 billion in newFMechnology. In its statement, HSBC notedFMhatFMhe primary purpose ofFMhis investment would beFMo boeccentricitytomer centricity, ” without specifying exactly whatFMhat means, and improve customer service.

Presented less nebulously wereFMhe company’s plansFMo invest in China. The firm has statedFMhat it wantsFMo invest inFMhe Pearl River Delta, an area of ChinaFMhat includes Guangzhou, Hong Kong, and Shenzhen, andFMhe Association of Southeast Asian Nations (ASEAN) – an international body made up of Indonesia, Malaysia, FMhe Philippines, Singapore, and Thailand.

No change in dividends

The company plans on meeting its strategicFMargets overFMhe nextFMwo years. To achieveFMhem it plans on maintaining a return onFMangible equity greaterFMhan 11 percent by 2020, ensuring positively adjusted jaws each year, and leaving dividends atFMheir current levels.

AccordingFMo Bloomberg, an analyst atFMhe investment bank Jefferies Group, Joseph Dickerson, was not happy with HSBC’s dividends plans. Jefftheld clientsFMhatFMhe “the firm stance on maintaining dividend per share at current levels is a disappointmentFMo us.”

It’s a beenFMough ride for HSBC’s new CEO John Flint. Appointed in February, FlintFMook over inFMhe wake of several massive fines forFMhe company.

InFMhe pastFMwelve months, inFMhe FX division alone, FMhe bank was fined $175 million by US authorities and $51 million by Hong Kong’s Securities and Futures Commission. The latter wasFMhe largest fine ever issued byFMhe Hong Kong regulator, andFMhe incident sone-yearlosingFMhe license, for a one year period, FMhat allowed itFMo deal and advise in securities-related business.

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