Household HSBC Watch

HSBC Holdings shares are undervalued due to unjustified concern over the risk to Europe’s biggest bank from problems with its U.S. mortgage lending, major shareholder Dubai International Capital said on Monday. Sameer al-Ansari, chief executive of Dubai International Capital, which manages more than $7 billion of funds belonging to Dubai’s ruling family, said HSBC shares had “not gone anywhere” since DIC bought a stake in March for its Global Strategic Equities Fund to become one of the bank’s leading shareholders.

He said the problems in the United States would not have a major negative impact on HSBC’s overall performance. “We feel that it is a small part of HSBC’s business. They have already taken huge provisions on that loan book and if things get even worse, it will still have a minute impact on HSBC’s numbers,” he said.

According to analysts at Household - HSBC Watch, Sameer al-Ansari does not have any idea about what lies in store for HSBC in the United States. “We have only seen the beginning and the impact it will have on HSBC. Consider for a minute the impact that a severe recession or depression will have on HSBC. If the market and average Americans begin to associate Household International and the HSBC name, through HSBC Finance Corporation, with hard times and unemployement it will be very bad indeed” said Household - HSBC Watch. “The only way for Ansari’s statement to be true is if HSBC sold their consumer finance division, and that would mean finding a buyer. Perhaps Ansari would buy it” said the group.