HSBC Cancels Contract With H&R Block

Oppenheimer has published a research report on H&R Block, Inc. HRB after the company announced on 12/24 that HSBC HBC terminated the contract where it provided HRB's RALs. In the report, Oppenheimer writes "The equivalent of coal in the stocking for HRB's franchisees and investors, HRB announced at 6:50pm ET on Christmas Eve that "as a result of a regulatory directive by the OCC, HSBC (HBC, $51.47, not rated) is terminating the contract under which HSBC provided all of HRB's refund anticipation loans (RALs)." With HSBC RALs conclusively out of the picture, and alternatives seemingly very limited for HRB with less then three weeks before the 2011 tax season begins, HRB's competitive position appears significantly weakened." Oppenheimer maintains its Perform rating on H&R Block, which closed yesterday at $11.80.