Stockchase Opinions

Dan Rohinton HSBC Holdings P L C HSBC-N HOLD Sep 24, 2025

Nice run. Hold, or take profits?

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.

$69.880

Stock price when the opinion was issued

banks
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HOLD
Political overlay of Brexit, as well as headquarters in Hong Kong. Fundamental issue of declining interest rates. Very strong balance sheet, good franchise. At some point, interest rates will turn around.
TRADE
It is a great bank if you want to be in Asia. The problem like many British and European banks is that they could not decide if they wanted to be in certain markets. They bought and built up certain businesses and did not do very well at those. They are a good retail bank and a very good commercial bank. They help companies grow in Asia and the US. Hong Kong will not be an opportunity for them now. It's not an expensive stock but they need to decide what they want to be.
PAST TOP PICK
(A Top Pick Jan 13/20, Down 29%) UK regulators came out and said banks cannot pay dividends. There were lawsuits in Hong Kong over this. Sold it and got out. The exposure is great but you cannot plan for regulators to do this.
DON'T BUY
She holds only Canadian or US banks, no need to go outside NA. Every so often, HSBC encounters problems. Sustainability in earnings growth is not there.
COMMENT

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.

DON'T BUY

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

DON'T BUY

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.

DON'T BUY

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.

DON'T BUY

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.