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Yahoo
14 hours ago
- Business
- Yahoo
Barclays vs. HSBC: Which Global Bank is the Smarter Buy Today?
Barclays PLC BCS and HSBC Holdings PLC HSBC are often the first names that come to mind when discussing prominent foreign banks. Both are based in London and have been streamlining their operations to enhance efficiency and focus on their core and Barclays have been reallocating their capital into higher-growth markets, with HSBC being particularly focused on the Asia-Pacific region. Can Barclays' streamlining initiatives outperform HSBC's strategic pivot to Asia to drive growth? To find out which stock presents a better investment opportunity, let's evaluate the underlying factors driving each bank's performance. Barclays has been striving to simplify operations and focus on its core businesses. In February 2024, the bank unveiled a three-year cost savings plan to enhance operating efficiency and focus on higher-growth markets. In sync with this, Barclays sold its consumer finance business in Germany in February 2025. Last year, the company transformed its operating divisions and divested its Italy mortgage portfolio and $1.1 billion in credit card receivables. Through these efforts, Barclays recorded gross savings of £1 billion in 2024 and £150 million in the first quarter of 2025. The company aims to achieve gross efficiency savings of £0.5 billion this year. By 2026, management expects total gross efficiency savings to be £2 billion and the cost-to-income ratio to be in the high 50s. Its first-quarter 2025 cost-to-income ratio was 57%.The company is reallocating these savings in high-growth businesses and markets. In April, Barclays entered into a collaboration with Brookfield Asset Management Ltd. to reshape its payment acceptance business with plans to inject roughly £400 million. In March, the bank announced a capital injection of more than INR 2,300 crore (£210 million) into its India operations. Last year, the company acquired Tesco's retail banking business, which complements its existing business. In 2023, Barclays acquired Kensington Mortgage, which bolstered its mortgage BCS' core operating performance remained unimpressive, net interest income (NII) and net fee, commission, and other income rose in 2024 and in the first quarter of 2025 on the back of structural hedges and Tesco Bank buyout, which indicates that Barclays' efforts to refocus on core operations have begun to bear fruits. The redeployment of capital into higher-growth businesses and markets through improving efficiency is a multifaceted approach to boosting profitability. Barclays remains committed to this approach, which is likely to help improve profitability over time. HSBC is taking steps to streamline and refocus its global operations. In early 2025, it announced a $1.5 billion cost-saving plan tied to organizational simplification, with estimated upfront charges of $1.8 billion by 2026. The bank is planning to redeploy another $1.5 billion from underperforming or non-core areas into strategic part of its global restructuring, HSBC has exited or divested operations in the United States, Canada, Argentina, Russia, Greece, New Zealand, Armenia and retail banking in France and Mauritius. It is also winding down certain investment banking activities in the U.K., Europe and the United States, and reviewing its operations in markets like Germany, South Africa, Bahrain and Malta to sharpen its focus and improve HSBC is doubling down on its Asia-focused strategy as the core of its long-term growth plan. It aims to become a leading wealth manager for high-net-worth and ultra-high-net-worth clients in the region, which now accounts for more than half of its operations. In mainland China, HSBC is rapidly expanding its wealth business by launching integrated lifestyle-based wealth centers in key cities, acquiring Citigroup's retail wealth portfolio, investing in digital capabilities and hiring talent to strengthen its Premier Banking, Private Banking and Asset Management India, HSBC is aggressively scaling up its presence. The bank received approval from the Reserve Bank of India to open 20 new branches, significantly expanding beyond its current footprint of 26 branches in 14 cities. With India's ultra-high-net-worth population projected to surge 50% by 2028, HSBC is positioning itself to capture this growth through its Global Private Banking, the acquisition of L&T Investment Management (2022) and ongoing enhancements to its Premier Banking revenue generation at HSBC has been subdued over the past several quarters. While the interest rate environment across the world improved, the financial impact of the challenging macroeconomic backdrop continues to weigh on the company's top-line growth. Not-so-impressive loan demand and a tough macroeconomic environment in many of its markets are concerns. The Zacks Consensus Estimate for BCS' 2025 and 2026 earnings indicates 21.2% and 23.3% growth, respectively. Over the past week, earnings estimates for 2025 and 2026 have been revised marginally downward. Earnings Trend Image Source: Zacks Investment Research On the contrary, the consensus mark for HSBC for 2025 suggests an increase of just 4.2% while the same for 2026 earnings indicates a decline of roughly 1%. Over the past seven days, earnings estimates for 2025 and 2026 have remained unchanged. Earnings Trend Image Source: Zacks Investment Research This year, Barclays' shares have performed quite well on the bourses compared with HSBC. The BCS stock has risen 37.9% on the NYSE, while HSBC has gained 22.3%. The industry has rallied 23.8% in the same time frame. YTD Price Performance Image Source: Zacks Investment Research Valuation-wise, HSBC is currently trading at a 12-month trailing price/tangible book (P/TB) of 1.09X, higher than its five-year median of 0.76X. BCS stock, on the other hand, is currently trading at a 12-month trailing P/TB of 0.77X, which is higher than its five-year median of 0.45X. Further, both are trading at a discount to the industry average of 1.70X. P/TB TTM Image Source: Zacks Investment Research Thus, Barclays is inexpensive compared to return on equity (ROE) of 12.55% is above Barclays' 8.04%. This reflects HSBC's efficient use of shareholder funds to generate profits. ROE Image Source: Zacks Investment Research Barclays appears to be the better investment opportunity, given its stronger near-term earnings outlook, attractive valuation and superior stock performance. The company's strategic capital redeployment to boost core businesses and restructuring efforts to improve efficiency paves the way for sustained profitability. Furthermore, its year-to-date stock rally demonstrates solid investor confidence relative to HSBC's modest HSBC's pivot to Asia and high-net-worth wealth management could yield significant long-term gains, especially as India and China's affluent classes expand. Its disciplined global exit strategy and cost-saving plan may improve returns. Yet, muted revenue growth and weak earnings performance expectations raise near-term concerns. While HSBC has a slightly better ROE, Barclays' higher growth momentum and aggressive capital return strategy make it the better bet present, BCS carries a Zacks Rank #2 (Buy) while HSBC has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barclays PLC (BCS) : Free Stock Analysis Report HSBC Holdings plc (HSBC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
21 hours ago
- Business
- Globe and Mail
Barclays vs. HSBC: Which Global Bank is the Smarter Buy Today?
Barclays PLC BCS and HSBC Holdings PLC HSBC are often the first names that come to mind when discussing prominent foreign banks. Both are based in London and have been streamlining their operations to enhance efficiency and focus on their core businesses. HSBC and Barclays have been reallocating their capital into higher-growth markets, with HSBC being particularly focused on the Asia-Pacific region. Can Barclays' streamlining initiatives outperform HSBC's strategic pivot to Asia to drive growth? To find out which stock presents a better investment opportunity, let's evaluate the underlying factors driving each bank's performance. The Case for Barclays Barclays has been striving to simplify operations and focus on its core businesses. In February 2024, the bank unveiled a three-year cost savings plan to enhance operating efficiency and focus on higher-growth markets. In sync with this, Barclays sold its consumer finance business in Germany in February 2025. Last year, the company transformed its operating divisions and divested its Italy mortgage portfolio and $1.1 billion in credit card receivables. Through these efforts, Barclays recorded gross savings of £1 billion in 2024 and £150 million in the first quarter of 2025. The company aims to achieve gross efficiency savings of £0.5 billion this year. By 2026, management expects total gross efficiency savings to be £2 billion and the cost-to-income ratio to be in the high 50s. Its first-quarter 2025 cost-to-income ratio was 57%. The company is reallocating these savings in high-growth businesses and markets. In April, Barclays entered into a collaboration with Brookfield Asset Management Ltd. to reshape its payment acceptance business with plans to inject roughly £400 million. In March, the bank announced a capital injection of more than INR 2,300 crore (£210 million) into its India operations. Last year, the company acquired Tesco's retail banking business, which complements its existing business. In 2023, Barclays acquired Kensington Mortgage, which bolstered its mortgage business. While BCS' core operating performance remained unimpressive, net interest income (NII) and net fee, commission, and other income rose in 2024 and in the first quarter of 2025 on the back of structural hedges and Tesco Bank buyout, which indicates that Barclays' efforts to refocus on core operations have begun to bear fruits. The redeployment of capital into higher-growth businesses and markets through improving efficiency is a multifaceted approach to boosting profitability. Barclays remains committed to this approach, which is likely to help improve profitability over time. The Case for HSBC HSBC is taking steps to streamline and refocus its global operations. In early 2025, it announced a $1.5 billion cost-saving plan tied to organizational simplification, with estimated upfront charges of $1.8 billion by 2026. The bank is planning to redeploy another $1.5 billion from underperforming or non-core areas into strategic priorities. As part of its global restructuring, HSBC has exited or divested operations in the United States, Canada, Argentina, Russia, Greece, New Zealand, Armenia and retail banking in France and Mauritius. It is also winding down certain investment banking activities in the U.K., Europe and the United States, and reviewing its operations in markets like Germany, South Africa, Bahrain and Malta to sharpen its focus and improve returns. Further, HSBC is doubling down on its Asia-focused strategy as the core of its long-term growth plan. It aims to become a leading wealth manager for high-net-worth and ultra-high-net-worth clients in the region, which now accounts for more than half of its operations. In mainland China, HSBC is rapidly expanding its wealth business by launching integrated lifestyle-based wealth centers in key cities, acquiring Citigroup's retail wealth portfolio, investing in digital capabilities and hiring talent to strengthen its Premier Banking, Private Banking and Asset Management services. In India, HSBC is aggressively scaling up its presence. The bank received approval from the Reserve Bank of India to open 20 new branches, significantly expanding beyond its current footprint of 26 branches in 14 cities. With India's ultra-high-net-worth population projected to surge 50% by 2028, HSBC is positioning itself to capture this growth through its Global Private Banking, the acquisition of L&T Investment Management (2022) and ongoing enhancements to its Premier Banking offering. Nonetheless, revenue generation at HSBC has been subdued over the past several quarters. While the interest rate environment across the world improved, the financial impact of the challenging macroeconomic backdrop continues to weigh on the company's top-line growth. Not-so-impressive loan demand and a tough macroeconomic environment in many of its markets are concerns. How Do Estimates Compare for BCS & HSBC? The Zacks Consensus Estimate for BCS' 2025 and 2026 earnings indicates 21.2% and 23.3% growth, respectively. Over the past week, earnings estimates for 2025 and 2026 have been revised marginally downward. Earnings Trend Image Source: Zacks Investment Research On the contrary, the consensus mark for HSBC for 2025 suggests an increase of just 4.2% while the same for 2026 earnings indicates a decline of roughly 1%. Over the past seven days, earnings estimates for 2025 and 2026 have remained unchanged. Earnings Trend Image Source: Zacks Investment Research BCS & HSBC: Price Performance, Valuation & Other Comparisons This year, Barclays' shares have performed quite well on the bourses compared with HSBC. The BCS stock has risen 37.9% on the NYSE, while HSBC has gained 22.3%. The industry has rallied 23.8% in the same time frame. YTD Price Performance Valuation-wise, HSBC is currently trading at a 12-month trailing price/tangible book (P/TB) of 1.09X, higher than its five-year median of 0.76X. BCS stock, on the other hand, is currently trading at a 12-month trailing P/TB of 0.77X, which is higher than its five-year median of 0.45X. Further, both are trading at a discount to the industry average of 1.70X. P/TB TTM Thus, Barclays is inexpensive compared to HSBC. HSBC's return on equity (ROE) of 12.55% is above Barclays' 8.04%. This reflects HSBC's efficient use of shareholder funds to generate profits. ROE Image Source: Zacks Investment Research HSBC or Barclays: Which Stock Offers Better Returns? Barclays appears to be the better investment opportunity, given its stronger near-term earnings outlook, attractive valuation and superior stock performance. The company's strategic capital redeployment to boost core businesses and restructuring efforts to improve efficiency paves the way for sustained profitability. Furthermore, its year-to-date stock rally demonstrates solid investor confidence relative to HSBC's modest gain. Meanwhile, HSBC's pivot to Asia and high-net-worth wealth management could yield significant long-term gains, especially as India and China's affluent classes expand. Its disciplined global exit strategy and cost-saving plan may improve returns. Yet, muted revenue growth and weak earnings performance expectations raise near-term concerns. While HSBC has a slightly better ROE, Barclays' higher growth momentum and aggressive capital return strategy make it the better bet now. At present, BCS carries a Zacks Rank #2 (Buy) while HSBC has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Picks Stock Most Likely to "At Least Double" Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren't winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%. See Our Top Stock to Double (Plus 4 Runners Up) >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barclays PLC (BCS): Free Stock Analysis Report HSBC Holdings plc (HSBC): Free Stock Analysis Report
Globe and Mail
4 days ago
- Business
- Globe and Mail
HSBC Lowers Financial Advice Fee to 1% for UK Premier Clients
HSBC UK, a subsidiary of HSBC Holdings PLC HSBC has lowered its financial advice fee for premier customers as a part of promotional discount available until the end of the year. The bank will now charge a 1% fee (with a minimum of £960) for customers taking advice, down from the typical 2.75% rate previously charged, with some exceptions. Xian Chan, head of Premier Wealth at HSBC UK, said: 'There are numerous scenarios where a customer might benefit from receiving financial advice, for example if they are planning for the long-term, have more sophisticated financial needs, or are facing a life milestone such as buying a home or preparing to retire.' Rationale Behind HSBC's Move The move aligns with HSBC's broader strategy to boost its offerings for 'mass affluent' clients, including the relaunch of its Premier account in February 2025. The bank recently reduced the minimum asset requirement to access its premier investment management service from £250,000 to £100,000. Additionally, it has introduced a switching incentive for new premier customers, offering eligible individuals a 'VIP shopping experience' at Selfridges, which includes a £500 gift card and other perks. Moreover, earlier this month, HSBC UK Private Banking adopted Addepar platform to enable wealth managers to provide robust services to ultra and high net worth clients. In mainland China, HSBC is growing its wealth business through lifestyle-focused centers and acquisitions like Citigroup's retail wealth arm, digital upgrades and hiring talent. HSBC Price Performance & Zacks Rank Over the past six months, shares of HSBC have rallied 19.7%, underperforming the industry 's growth of 24.6%. Currently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Efforts to Expand Offerings by Other Finance Firms Earlier this month, Carlyle Group Inc. CG announced a collaboration with Citigroup Inc. C to expand asset-backed financing opportunities within the fintech specialty lending space. The collaboration will integrate Carlyle's extensive investment network with the expertise of Citigroup's Spread Products Investment in Technologies team, a leading venture equity investor in fintech specialty lending. Similarly, U.S. Bancorp USB entered a partnership with Fiserv to integrate its Elan Financial Services credit card program into the latter's Credit Choice solution. The collaboration aims to enhance digital card issuance capabilities, providing financial institutions with a seamless, integrated experience. The integration of Elan's credit card program into Fiserv's Credit Choice solution strengthens USB's digital-first strategy. This integration will enable consumers and small businesses to access both debit and credit card account details within a unified digital platform for consumers and small businesses. This will create a better user experience, allowing customers to manage both types of cards in one place. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Citigroup Inc. (C): Free Stock Analysis Report U.S. Bancorp (USB): Free Stock Analysis Report Carlyle Group Inc. (CG): Free Stock Analysis Report HSBC Holdings plc (HSBC): Free Stock Analysis Report
Bloomberg
5 days ago
- Business
- Bloomberg
HSBC Said to Create New Team for Tough Infrastructure Deals
HSBC Holdings Plc is setting up a dedicated team to finance infrastructure projects that would typically struggle to attract capital from other sources, according to people familiar with the matter. The corporate and institutional banking unit is looking for a global head of strategic financing partnerships, the people said, asking not to be named discussing private deliberations. HSBC started searching for someone to fill the role, which may be based in the US, a few months ago but has yet to settle on a candidate, they said. The role will report to Danny Alexander, who is chief executive of infrastructure finance and sustainability within HSBC's CIB unit, they said.
Bloomberg
18-06-2025
- Business
- Bloomberg
HSBC Weighs Asking Staff to Show Up in Office Three Days a Week
HSBC Holdings Plc is considering telling all its employees to work from one of the bank's offices at least three days a week, as it looks to tighten some of its flexible policies that have been in place since the pandemic. The new arrangement is under discussion and no decision has yet been made, a person familiar with the matter said, asking not to be identified discussing internal deliberations. A representative for the British lender declined to comment.
