The Bernie Madoff investment scandal was uncovered in 2008 but it is still reverberating on banks’ balance sheets today. HSBC said Monday that it has set aside $1.1 billion to cover litigation by investors who lost money in the Ponzi scheme. One of the bank’s European businesses was in charge of looking after money and administration for funds that invested with Madoff’s company. One of those funds, Herald Fund, sued it in 2009 after the scandal came to light, saying the bank should repay billions of doll ...

Core Viewpoint - HSBC Holdings announced a share buyback program, indicating confidence in its financial position and future growth prospects [1] Group 1 - The company will repurchase 1.2972 million shares at a total cost of HKD 134 million [1] - The buyback price range is set between HKD 102.9 and HKD 103.5 per share [1]

Getty Images Listen below or on the go via Apple Podcasts and Spotify Avidity (RNA) stock surges on $12B Novartis (NVS) deal. (00:29) Bessent unveils Fed chair finalists before year-end decision. (01:21) HSBC faces $1.1B loss from Madoff fraud ruling, stock falls. (02:03) This is an abridged transcript. We begin with an update to a story we told you about on Wall Street Brunch with Kim Khan. Avidity Biosciences (NASDAQ:RNA) is up 42% in premarket action after Novartis (NYSE:NVS) agreed to buy the bio ...

Core Viewpoint - HSBC is facing a financial impact of $1.1 billion due to a legal ruling related to the Bernie Madoff Ponzi scheme, leading to a decline in its share price [1][2][4]. Financial Impact - HSBC announced it would set aside $1.1 billion in its third quarter results to cover the costs associated with the lawsuit [1][4]. - The lawsuit was initiated by Herald Fund SPC, which claimed losses from investments in Madoff's funds, amounting to $2.5 billion in securities and cash plus interest, or damages of $5.6 billion plus interest [8]. Legal Proceedings - The Luxembourg Court of Cassation rejected HSBC Securities Services Luxembourg's appeal regarding the restitution claim, prompting HSBC to set aside the financial impact [5][6]. - HSBC plans to pursue a second appeal before the Luxembourg Court of Appeal to contest the amount it may be required to pay [7]. Market Reaction - Following the announcement, HSBC's shares fell by as much as 2.4% on the FTSE 100 [1]. - Despite the recent decline, HSBC's shares have increased nearly 27% year-to-date due to a significant restructuring effort by its CEO [9]. Additional Context - HSBC is also dealing with the financial implications of a $13.6 billion deal to take its Hong Kong-listed business, Hang Seng Bank, private, which has led to the suspension of share buybacks for the next three quarters [8][9].

Core Viewpoint - HSBC Holdings is set to recognize a provision of $1.1 billion in Q3 2025 related to the Luxembourg court ruling on the Herald Fund SPC case, which is tied to the Bernard Madoff Ponzi scheme. This provision, while categorized as a significant special item, is expected to negatively impact the CET1 ratio by approximately 15 basis points, potentially leading to a negative market reaction. JPMorgan and market consensus have differing expectations for HSBC's impairment charges in 2025, with JPMorgan maintaining an "Overweight" rating and a target price of HKD 122 [1]. Group 1 - HSBC has faced legal challenges since 2009 related to the Madoff fraud case, with the Herald Fund SPC seeking to recover $2.5 billion in securities and cash, or $5.6 billion in damages (including interest). The Luxembourg court recently rejected HSBC's appeal regarding the recovery of securities but accepted the appeal for cash recovery, prompting HSBC to file a second appeal. The total claims related to Madoff fraud, including those from four other pending lawsuits, amount to $5.2 billion (including interest) [2]. - The market is likely to scrutinize whether the $1.1 billion provision is sufficient given the total claim amount of $2.5 billion from the Herald Fund lawsuit and the additional claims from other lawsuits. The litigation process may be lengthy, creating ongoing uncertainty [3]. - The increase in provisions may raise concerns about the management's guidance of a 40 basis point credit cost for FY 2025, despite the provision being classified as a significant special item. The $1.1 billion provision will also lead to a 15 basis point decline in the CET1 ratio, posing a downside risk to share buybacks [3].

就诉讼背景：自2009年起，汇控一直面临与Bernard Madoff欺诈案相关的卢森堡法律诉讼，其中Herald Fund SPC要求追回25亿美元的证券及现金，或56亿美元的损害赔偿(均含利息)。10月24日，卢森堡法院 驳回了汇丰就证券追回的上诉，但接纳了现金追回的上诉，促使汇丰提出第二次上诉。在此期间，汇丰 将于2025年第三季度确认11亿美元拨备，对CET1比率造成约15个基点的影响。由于上诉程序仍在进行 且索偿金额计算复杂，最终财务影响仍存在不确定性。值得注意的是，除Herald外，另有四宗与Bernard Madoff欺诈案相关的未决诉讼，总索偿金额(包括Herald)达52亿美元(含利息)。 智通财经APP获悉，摩根大通发布研报称，汇丰控股(00005)公布会在今年第三季计提11亿美元拨备，此 举与卢森堡法院就Herald Fund SPC一案的裁决有关，该基金为投资于Bernard Madoff's(马多夫)庞氏骗 局。尽管此拨备属于重大特殊项目，且不会影响经调整ROTE及股息，但将对普通股权一级比率(CET1) 造成约15个基点的影响，料股价反应负面。需注意，摩根大通及综合市场共识对汇控2 ...

HSBC, one of your heavy volume stock movers this morning due to set aside $1.1% billion to cover litigation by investors who lost money in Bernie Madoff's fraud in a case which dates all the way back to 2009. Talk about a throwback. Shares down about 1%.We'll call it all over the stories. Bloomberg, Tom Metcalf, who leads our media, finance and investing coverage. Can you just walk us through the details of this.We haven't heard Bernie Madoff's name in a while. Yeah, exactly. So, you know, sort of throwback ...

HSBC will set aside $1.1 billion to cover litigation by investors who lost money in Bernard Madoff's fraud, the latest global bank to face a significant hit from litigation dating back years. Bloomberg's Tom Metcalf reports. ...

Core Insights - Challenges related to commercial property credit quality will persist for Hong Kong banks in the upcoming year, although there are positive prospects in capital markets and yuan business [1] - The residential property market in Hong Kong is showing signs of stabilization, with a modest price increase of 0.14% in August, reducing the overall price decline for the year to 0.24% [3] - The commercial real estate credit quality issues represent a small portion of the overall lending by Hong Kong banks, and sufficient provisions have been made to manage the risks [4][6] Commercial Property Sector - The Hong Kong Monetary Authority (HKMA) is closely monitoring the credit quality of the commercial property sector, which is expected to remain a challenge for banks [1] - HSBC and Hang Seng Bank reported a combined provision of US$500 million for office and retail properties in the first half of the year, marking a fivefold increase from the previous year [4] - The oversupply in the office commercial real estate market is exerting downward pressure on rents and capital values, as noted by HSBC's CEO [5] Residential Property Market - Hong Kong's lived-in home prices have recorded a modest gain for the fifth consecutive month, indicating a stabilizing residential market [3] - The overall price decline in the residential market has narrowed to 0.24% for the year, reflecting a positive trend [3] Banking Sector Resilience - The banking sector in Hong Kong is characterized by a strong capital ratio and profitability, which helps mitigate concerns regarding commercial real estate credit quality [6]

Core Viewpoint - HSBC Holdings will record a US$1.1 billion provision in its third-quarter earnings due to uncertainties surrounding payouts in lawsuits related to the Bernard Madoff fraud case [1][4]. Financial Impact - The provision will affect the group's common-equity tier one capital ratio by approximately 15 basis points, which measures the bank's core capital against its risk-weighted assets [2]. - This provision is classified as a "material notable item" and will not influence the full-year rate of return excluding notable items in 2025 or any dividend payouts [2]. Legal Context - The provision is linked to a 2009 lawsuit by Herald Fund SPC, which is seeking restitution of securities and cash valued at US$2.5 billion, with total damages claimed at US$5.6 billion due to losses from the Madoff Investment Securities collapse [4]. - HSBC's decision to make the provision followed a Luxembourg Court ruling that denied HSBC Securities Services Luxembourg's appeal regarding Herald's claims for securities restitution, although it allowed an appeal for the cash-restitution claim [5]. Ongoing Legal Proceedings - HSBC Securities Services Luxembourg plans to pursue a second appeal before the Luxembourg Court of Appeal and will contest the payment amount if the second appeal is unsuccessful [5]. - The case is part of a series of lawsuits against various HSBC entities stemming from the Madoff fraud, with HSBC having provided custodial and administration services to non-US funds that invested approximately US$8.4 billion with Madoff Securities as of November 2008 [6]. Future Considerations - HSBC acknowledged that the eventual financial impact could vary significantly due to the ongoing second appeal and the complexities involved in determining the restitution amount [7].