Download PDF

1. Company Snapshot

1.a. Company Description

HSBC Holdings plc provides banking and financial services worldwide.The company operates through Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets segments.The Wealth and Personal Banking segment offers retail banking and wealth products, including current and savings accounts, mortgages and personal loans, credit and debit cards, and local and international payment services; and wealth management services comprising insurance and investment products, global asset management services, investment management, and private wealth solutions.


This segment serves personal banking and high net worth individuals.The Commercial Banking segment provides credit and lending, treasury management, payment, cash management, commercial insurance, and investment services; commercial cards; international trade and receivables finance services; foreign exchange products; capital raising services on debt and equity markets; and advisory services.It serves small and medium sized enterprises, mid-market enterprises, and corporates.


The Global Banking and Markets segment offers financing, advisory, and transaction services; and credit, rates, foreign exchange, equities, money markets, and securities services; and engages in principal investment activities.It serves government, corporate and institutional clients, and private investors.HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

Show Full description

1.b. Last Insights on HSBA

HSBC Holdings' recent performance was driven by a 20.7% increase in share price over the past 3 months, with a 7-day return of 0.4% and a 30-day return of 8.1%. The company's strong revenue growth, resilient earnings power, and disciplined cost control have contributed to its positive narrative. Analysts have reworked their expectations, nudging up the fair value estimate to £11.25 from £10.88, reflecting a modestly higher valuation. The discount rate has eased to 10.56%, and revenue growth assumptions remain at 8.52%. Recent analyst and boardroom moves have also shifted the narrative around the stock, with some analysts upgrading their ratings and others maintaining a cautious stance.

1.c. Company Highlights

2. HSBC Holdings plc Delivers Strong 2025 Performance

HSBC Holdings plc reported a robust 2025 full-year performance, with group revenues growing 5% to a record level, and profit before tax rising 7% to $36.6 billion. The return on tangible equity was 17.2%, and the company delivered 3% cost growth, in line with its target. The earnings per share (EPS) for the year was $0.207, which was lower than the estimated $0.2365. The company's fourth-quarter revenues grew 6% to $17.7 billion, and profit before tax was $8.6 billion, up 17%.

Publication Date: Feb -26

📋 Highlights
  • Record Profit and Revenue Growth: Profit before tax rose 7% to $36.6 billion, with revenues up 5% in 2025.
  • Strategic Cost Savings: Achieved 3% cost growth, on track to deliver $1.5 billion annualized simplification savings by mid-2026.
  • Hang Seng Privatization Synergies: Completed $13.7 billion acquisition, unlocking $0.9 billion in synergies ($0.5 billion cost, $0.4 billion revenue).
  • Deposit and Wealth Growth: Customer deposits reached $1.8 trillion (+$78 billion Q4), while Wealth fee income surged 20% to $2.1 billion.
  • 2026-2028 Targets: Aims for 5% revenue growth by 2028, 17%+ RoTE, and 50% dividend payout ratio, with CET1 capital ratio at 14.9% (up 40 bps Q4).

Revenue Growth Drivers

The company's revenue growth was driven by various factors, including a 5% growth in deposit balances, with growth in each of the company's four businesses. The company also grew fee and other income, with Transaction Banking growing 4% and Wealth growing 24%. The Wealth business grew fee and other income by 20% year-on-year to $2.1 billion, driven by all four income areas. As Georges Elhedery stated, "wealth remains a growth opportunity, with a strong presence in Asia and the Middle East, and a better catchment of affluent and high net worth customers."

Strategic Progress and Guidance

The company has made progress on its three strategic priorities: being simple and agile, driving customer centricity, and delivering focused sustainable growth. It has reduced net managing director positions by 15% and expects to deliver $1.5 billion of annualized simplification saves by the first half of 2026. The company guides for 1% cost growth on a target basis for 2026 while reinvesting in the business. The company expects broad-based revenue growth across all businesses in 2026, driven by deposits, Wealth, and Transaction Banking.

Valuation and Dividend Yield

Using the provided valuation metrics, HSBC's Price-to-Tangible Book Value (P/TBV) can be approximated using the 'P/B Ratio' at 1.68. The Dividend Yield is 3.66%. Analysts estimate next year's revenue growth at 3.7%, which is lower than the company's guidance. The current valuation multiples imply that the market has already priced in a certain level of growth and profitability.

Outlook and Challenges

The company is confident in its guidance, with a 5% revenue growth in 2028, and a return on tangible equity of 17% or better, with a 50% dividend payout ratio. However, the company faces challenges, including changes in shopping patterns, with a shift towards food and beverage, and the office sector being closely watched, with vacancy rates still around 17%. The company is being more selective in its customer acquisition, with a focus on affluent customers, and expects slightly slower growth in new-to-bank customers in 2026.

3. NewsRoom

Card image cap

FTSE 100 Live: London stocks climb as HSBC becomes largest company

Jan -27

Source: proactiveinvestors.com

Card image cap

FTSE 100 Live: London stocks climb with HSBC taking crown as largest company

Jan -27

Source: proactiveinvestors.com

Card image cap

Luxury bets on rich Americans and new designers to revive growth

Jan -25

Source:

Card image cap

HSBC Just Doubled Its Price Target on Intel Stock. Should You Buy INTC Ahead of Earnings?

Jan -22

Source:

Card image cap

Intel Stock Falls Back from 4-Year High Ahead of Earnings. What Has the Market Excited.

Jan -22

Source:

Card image cap

Intel Stock Surges to 4-Year High Ahead of Earnings. Why Optimism Is Growing.

Jan -22

Source:

Card image cap

Intel Stock Surges to 4-Year High Ahead of Earnings. Why Optimism Is Growing.

Jan -22

Source:

Card image cap

How Investors May Respond To Albemarle (ALB) After HSBC Upgrade And Stronger Balance Sheet Focus

Jan -21

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.61%)

6. Segments

Wealth and Personal Banking

Expected Growth: 5.5%

HSBC’s personal wealth management segment is driven by increasing high net worth individuals, growing demand for digital wealth management solutions, and strategic acquisitions, fostering a growth rate of 5.5%.

Corporate and Institutional Banking (CIB)

Expected Growth: 5.3%

HSBC's Corporate and Investment Banking segment benefits from increasing corporate financing activities, growth in emerging markets and increasing demand for digital banking solutions.

International Wealth and Premier Banking (IWPB)

Expected Growth: 6.2%

HSBC's global wealth and banking services for high net worth individuals will grow driven by increasing demand for wealth management, expansion in Asia, and growth in digital channels.

Corporate Centre

Expected Growth: 6.3%

HSBC's growth is driven by its strong presence in Asia, increasing digital banking adoption, and expanding wealth management business. The bank's diversified business model and efforts to improve cost efficiency are also expected to support growth.

7. Detailed Products

Retail Banking

Provides personal banking services to individuals, including current and savings accounts, credit cards, personal loans, and mortgages.

Wealth and Personal Banking

Offers investment and wealth management services, including insurance, pensions, and investments.

Commercial Banking

Provides financial services to small and medium-sized enterprises, including business lending, cash management, and trade finance.

Global Banking and Markets

Offers investment banking, markets, and securities services to corporate and institutional clients.

Global Private Banking

Provides wealth management services to high net worth individuals and families.

Transaction Banking

Offers cash management, trade finance, and securities services to corporate and institutional clients.

8. HSBC Holdings plc's Porter Forces

Forces Ranking

Threat Of Substitutes

HSBC's threat of substitutes is moderate due to the presence of alternative banking services and digital payment platforms. However, the complexity of banking services and the need for regulatory compliance limit the threat of substitutes.

Bargaining Power Of Customers

HSBC's customers have low bargaining power due to the bank's large customer base and diversified product offerings. Additionally, the complexity of banking services makes it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

HSBC's suppliers have low bargaining power due to the bank's large scale of operations and its ability to negotiate favorable terms with suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the banking industry, including regulatory requirements and the need for significant capital investments.

Intensity Of Rivalry

The intensity of rivalry in the banking industry is high due to the presence of several large players, including JPMorgan Chase, Bank of America, and Citigroup. HSBC faces intense competition in terms of pricing, product offerings, and customer service.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.93%
Debt Cost 6.73%
Equity Weight 44.07%
Equity Cost 6.73%
WACC 6.73%
Leverage 126.89%

11. Quality Control: HSBC Holdings plc passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HSBC

A-Score: 7.6/10

Value: 5.7

Growth: 7.3

Quality: 6.2

Yield: 8.8

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
BBVA

A-Score: 7.4/10

Value: 6.4

Growth: 9.2

Quality: 5.9

Yield: 7.5

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
ING

A-Score: 6.9/10

Value: 4.8

Growth: 5.7

Quality: 4.8

Yield: 9.4

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
NatWest

A-Score: 6.8/10

Value: 6.4

Growth: 5.6

Quality: 6.5

Yield: 7.5

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Barclays

A-Score: 6.6/10

Value: 7.2

Growth: 7.2

Quality: 5.6

Yield: 5.0

Momentum: 9.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
UBS

A-Score: 4.8/10

Value: 3.2

Growth: 4.0

Quality: 4.0

Yield: 5.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.74$

Current Price

11.74$

Potential

-0.00%

Expected Cash-Flows