LONDON, July 20, 2026, 10:06 BST
- London markets traded. HSBC edged down 0.04% to 1,491.6 pence by 10:00 BST.
- The initial consensus expects quarterly credit losses to decrease by 17% compared with the rate seen in Q1.
- HSBC has a P/E ratio that is 20% higher than Standard Chartered Plc (LON:STAN) and 39% higher than Barclays Plc LON:BARC.
HSBC shares edged down 0.04% to 1,491.6 pence on Monday. A greater challenge is ensuring a reduction in quarterly credit losses.
The current analyst forecasts already reflect that deceleration. The shares also trade at a distinct premium compared to immediate competitors.
The bank will announce interim results on August 4. Expected credit losses (ECL) for the first quarter totaled $1.3 billion.
Preliminary company-compiled consensus estimates 2026 ECL at $4.547 billion. Following the first quarter, $3.247 billion remains for the next three quarters.
This equates to $1.082 billion per quarter, representing a 17% decrease compared to the rate in Q1. The figure is based on a run-rate calculation rather than a projection.
The deceleration appears likely, though it is not certain. Two specified factors accounted for 54% of the charge in the first quarter.
A securitisation exposure linked to fraud resulted in a $400 million cost. An additional $300 million was driven by economic volatility and uncertainty in the Middle East.
Pam Kaur, HSBC’s Chief Financial Officer, stated that the bank examined its most significant risk concentrations. “We don’t see anything comparable there,” she said. Reuters
The data below, sourced from Google Finance, reflects figures recorded at approximately 10:00 BST.
| Company | Price, pence | Day | Gap to 52-week high | Above 52-week low | P/E | Dividend yield |
|---|---|---|---|---|---|---|
| HSBC | 1,491.60 | down 0.04% | 6.2% off 52-week high | 64.1% above 52-week low | 16.58x | 3.73% |
| Standard Chartered | 2,103.00 | unchanged | 7.7% off 52-week high | 63.7% above 52-week low | 13.76x | 2.17% |
| Barclays | 515.97 | down 0.14% | 6.9% off 52-week high | 50.0% above 52-week low | 11.93x | 1.67% |
HSBC’s price-to-earnings ratio is roughly 20% higher than Standard Chartered’s and sits 39% above that of Barclays. Among the group, HSBC also shows the largest listed dividend yield.
The high returns contribute to the premium. Return on tangible equity for Q1 reached 18.7%, when excluding notable items. All four of HSBC’s business units reported returns above 17% on this measure.
Chief Executive Georges Elhedery stated: “We remain confident in achieving the targets we set out in February 2026.” HSBC
Market consensus projects reported RoTE at 17.1% for 2026, with 17.8% forecast when excluding notable items. Pretax profit is anticipated to reach $37.105 billion.
Net interest income in banking acts as a buffer. HSBC lifted its 2026 projection to approximately $46 billion, up from a prior minimum of $45 billion.
Management increased its ECL forecast to approximately 45 basis points, up from the earlier projection of 40 basis points. Share repurchases continue to depend on quarterly capital reviews.
Risks: New private-credit losses, escalating conflict in the Middle East, and reduced wealth flows pose threats to earnings. HSBC’s stress tests indicated a pretax impact in the mid-to-high single-digit range. This may push RoTE down below 17%.
According to consensus estimates, a Q2 ECL of approximately $1.08 billion aligns with the trajectory for the full year. Should another quarter report $1.3 billion, it would leave little room for flexibility. This poses the valuation challenge.
