Brexit' Vote Batters British Banks in Hong Kong

HONG KONG—Shares of HSBC Holdings PLC and Standard Chartered PLC plunged Friday in Hong Kong trading as investors weighed the fallout on London-headquartered banks of a U.K. vote to exit the European Union.

HSBC's shares plummeted 11.1% in midday Hong Kong trading, while Standard Chartered shares fell more than 12%. Shares dropped sharply throughout morning trading as results rolled in from the U.K. HSBC was the worst-performing stock in the city's Hang Seng Index for the day so far.

While HSBC and Standard Chartered are known for their operations in Asia and elsewhere across the globe, they still have their headquarters and big businesses in the U.K. The drop in the British pound and a range of other prospective difficulties could arise for the lenders, hurting their revenue and increasing costs.

HSBC Chief Executive Stuart Gulliver said earlier this the year the U.K. lender may have to move 1,000 jobs to Paris if Britain leaves the EU. The bank, which has generally been viewed by analysts and investors as a steady stock, underperformed the overall Hang Seng Index, which fell 4.7%.

Standard Chartered's share performance has already been battered this year after recording its first full-year loss since 1989. The bank, which relies heavily on Asia and commodities for returns, in February reported a $2.36 billion loss and warned that earnings would remain subdued this year as it overhauls its operations.

Morning losses also spread to U.K. insurer Prudential PLC, whose Hong Kong shares suffered a similarly sharp decline of 11%.

Shares in Asian regional lenders, such as DBS Group Holdings Ltd., fared better but still took big hits. Bank of China Ltd., the most international of the Chinese state banks, fell about 4% in Hong Kong trading.

The Hang Seng China H-Financials Index, which tracks 20 Chinese financial stocks, is also down 4.4%.

Julie Steinberg contributed to this article.

Write to Kane Wu at [e-mail]

(END) Dow Jones Newswires

June 24, 2016 01:15 ET (05:15 GMT)

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