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HSBC; Solid for StanChart And More Credit Positive Than Barclays' Bumper Buyback

FINANCIALS

HSBC (HSBA LN) further thoughts ahead of conf call. Solid lateral for StanChart, both perhaps more credit positive than Barclays and its bumper buyback news yesterday.


  • Much as StanChart (STAN LN) is a different business in Asia and tends to be seen as the more accident prone at times, this lack of China real estate meltdown may give some comfort on a credit that trades (CDS) 10bp wider than HSBC (see graphic).
  • StanChart (and HSBC) do continue to trade meaningfully wider than the Asia ex-JP senior IG financial index, though it’s only a year ago that they traded broadly in line. If China fears are set to subside, there’s the bull story towards that tighter level.
  • Capital return and slowing revenues are, again, going hand-in-hand for banks. Barclays yesterday indicating it’s set to buyback over 40% of its own market cap to end-26 but HSBC, with slowing revenues, is much less aggressive in this area. Is this a residual fear around China? Either way, it’s a credit positive relative to Barclays. StanChart’s position here (results on 23-Feb) will be instructive.
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