Lorne Steinberg HSBC Holdings P L C HSBC-N BUY May 19, 2016

It is going through a very big re-structuring but he's not sure what they want to do, They have a big franchise in Asia and the UK. They sold the Canadian side of the business to Royal Bank which did well with it.

A great bank, but prefers other European banks. Not as well run as Canadian banks, and has less growth.

Their focus is less Europe, more Asia and Middle East. To do this, they are laying off a lot of staff. Return on invested capital is only 6%, but the cost of that capital is 7%. Negative, despite a 5% dividend that won't rise.

Well run, deposit footprint's OK. Probably more domestic options available that are equally high quality. Beneficiary of globalization, which is starting to move in a different direction. In the US, try JPM or BAC, or BNP in Europe.

They operate in Asia where there is serious growth, but also it's very competitive. Better to buy a Canadian bank which enjoys an oligopoly.

Banks tend to move on the same macro variables. It's too painful on your taxes to sell this one only to buy another similar one. You're better off just holding on.

Not a compelling barn-burner buy today, at best it's a hold. European banks are tactically more attractive than the US and, especially, the Canadian banks.