HSBC is lagging rivals as results approach, where 'concrete guidance' needed
Published: 14:40 13 Feb 2025 GMT
HSBC Holdings PLC (LSE:HSBA), which reports final results next Wednesday, 19 February, is the worst performing of the UK's big five over the past 12 months.
Some City analysts have been supportive recently, with those at Citi liking HSBC as its Asia-focused pick over rival StanChart as higher-for-longer US rates and Asian wealth growth are supportive factors.
Both of the FTSE 100's Asia-centred lenders are seen as benefiting from hopes that higher US yields will support margins, but risk that those gains are offset by lower loan growth in Hong Kong in particular.
Headlines lately have raised expectations about cost cuts, with the bank expected to rein back investment banking in the UK, Europe and North America under the next stage of new chief executive Georges Elhedery’s restructuring plan.
At the end of last year, HSBC announced a split into four operations divided geographically by east and west as part of US$3 billion in cost cuts.
“Our intention is to move to a more competitive, scalable, financing-led model,” the firm said in a recent memo to staff.
“We will retain more focused M&A and equity capital markets capabilities in Asia and the Middle East, and we will look to wind down those activities in Europe, the UK and the Americas,” an HSBC spokesperson said last month.
But UBS said some concrete guidance from the bank would be helpful in these results.
The key questions to be around the magnitude of restructuring charges and clarity of new targets for NII, costs and payouts in order to "shift the debate".
