HSBC Holdings Plc (HSBA) Chief Executive Officer Stuart Gulliver said that the bank is “permanently undervalued” by as much as $28 billion due to U.K. financial regulations introduced after the debt crisis, the Sunday Telegraph said.
The U.K. banking levy and the Treasury’s demand that banks set aside capital to absorb a loss of as much as 20 percent of their balance sheets will cost HSBC $700 million and $2.1 billion, respectively, in 2012, the newspaper quoted the CEO as saying. At a price-earnings ratio of 10, that would shave about 17 percent off the bank’s market capitalization, Gulliver told the newspaper.
Gulliver has asked the Treasury to make the banking levy a windfall tax, which would make it tax-deductible and protect HSBC’s dividend, the Sunday Telegraph reported.
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