James Moore: HSBC may be coining it in now, but it still has key questions to answer

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The Independent Online

Outlook Remember when the banks were getting pilloried for making too much money? They've been so busy losing it recently that it seems like a very long time ago.

But HSBC is a little bit different. It said that it made pots of the stuff, more even than the City had expected, in the first quarter of the year.

As such it took one on the chin from the Robin Hood Tax Campaign. The bank might actually take that as a back-handed compliment. It is looking decidedly chipper, and even some of the more cynical analysts (cynical in that they take what the banks tell them with a healthy degree of scepticism) were moved to offer favourable comment.

When it comes to banking, HSBC is ahead of the curve. Actually, it may not even be on the same curve as the rest, including Britain's other bailout-free "global" bank, Barclays.

It is deposit-funded, it has its fingers in a good number of the world's sprightliest economies, it pays dividends consistently and while its executives expect to be paid ridiculous sums of money for overseeing these happy circumstances, they don't get their hands on most of their money until they have retired.

Costs and bad debts are down, revenues are up, and even the dour chief executive Stuart Gulliver was moved to say he sees calmer waters ahead of him.

So everything is rosy in the garden now? Well, up to a point. Perhaps we shouldn't be worrying about how much money HSBC is making so much as how it is making it.

Its past involvement in money laundering demonstrates that. The US authorities hit the bank hard – probation and nearly $2bn (£1.2bn) in fines. HSBC has reacted. Its corporate centre will in future keep the outlying parts of the empire on a much tighter leash. A lot of the more far-flung businesses have been jettisoned. It wants to play nice and prove that while it is too big to fail, it is not too big to manage. We'd better hope that is the case: some in the US wanted to hit HSBC harder, booting it out of the country. But they couldn't do that without causing massive disruption to the global financial system.

The Robin Hood campaign would like banks to pay a financial transaction tax. The only problem is HSBC may well react to that by walking out of Britain. That is a gun it has long held to the heads of the UK authorities.

The watchword for the World's Local Bank these days does seem to be conservatism (with a small c). So we probably won't see HSBC traders losing billions along the lines of JP Morgan's "London Whale".

A good thing too. Because while HSBC may not be a particularly risky bank, at least at the moment, there are certainly risks in having it around.