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The bank which convinced Woodford to break 10-year habit

by Dylan Lobo on May 16, 2014 at 07:56

The bank which convinced Woodford to break 10-year habit

Neil Woodford has used his new found freedom to explain why he bought into a bank for the first time in 10 years.

Woodford revealed he first bought into HSBC in the middle of the last year when at Invesco Perpetual and has been adding to his stake in recent months lifting it to 2% of his £3.7 billion St James’s Place mandate.

Speaking at dinner last night hosted by Chelsea Financial Services, Woodford said: ‘I don’t have a religious aversion to banks and HSBC is undervalued.'

He added: ‘While HSBC is exposed to many of the pressures that keep me out of banks, and has done some stupid things and will probably continue to get fined, the direction of travel at the bank is clear. It is a bank that can build a capital base and reduce leverage and one I believe will pay and sustain a dividend.’

Woodford also believes the bank has learnt from its mistakes and was full of praise for its management.

‘Stuart Gulliver [HSBC chief executive] gets it and is doing a good job, it’s an ugly shift but he doing the right things.

‘The environment for banks is going to remain difficult but HSBC is much further down the path of repair, while other banks have far hard yards to go as they still haven’t cleansed their balance sheets from bad loans.’


The fact some in the room were surprised to learn Woodford had a holding in a bank a good year after he had actually bought is a reflection of how more open he has become since he launched his new fund firm, Woodford Investment Management.

Woodford described the environment at his previous employer as ‘interesting’ and vowed this new level of communication was important and would continue no matter how successful his new firm became.

‘How we communicate with the media and investors is really important. We won’t be doing what we did, we will be more open and accessible.

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3 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

May 16, 2014 at 10:29

Yes , lets all buy demi-God Neil Woodfords latest prediction, so that he can sell into the rise. Baaaa !

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Pumpernickel Von Blackwelshire

May 16, 2014 at 13:36

Is that you Mark?

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Ian Lees

May 17, 2014 at 16:30

It is a shame that Neil Woodford gives some explanation - and is then vilified by the envious and the pompous . I am of the opinion that HSBC is undervalued - and their service extremely exaggerated . . . . lack of interest form employees lack of management ( but worldwide exposure ) should make the shares attractive in my opinion. My other opinion is I will invest in Neil Woodfords fund - because I am a long term investor - and he, Neil Woodford . . . is a long term manager.

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