Hong Kong, Jan 27, 2026, 15:50 HKT — Regular session.
- Shares of HSBC climbed in Hong Kong following the bank’s announcement that its Hang Seng Bank take-private deal has become effective.
- Investors are eyeing possible upgrades to profitability targets in HSBC’s annual results due next month.
- The U.S. Federal Reserve’s rate decision on Wednesday will serve as a key short-term indicator for global bank shares.
Shares of HSBC Holdings Plc climbed in Hong Kong on Tuesday after the lender confirmed its court-backed plan to take Hang Seng Bank private had gone through. The unit’s listing is set to be withdrawn at 4 p.m. local time. HSBC’s Hong Kong shares gained HK$3.70, or roughly 2.8%, closing at HK$134.70. In New York, the stock rose $1.15 to $85.09, while in London it traded at 1,242.2 pence. (HSBC)
This matters because HSBC ranks among the biggest names in Hong Kong’s market and acts as a key indicator for the banking sector’s momentum heading into earnings season. Investors are searching for clues that banks can sustain returns amid looming rate cuts and rising competition for loans.
A Reuters report on Monday revealed HSBC is set to raise its return on tangible equity (ROTE) forecast—this measure excludes intangibles and focuses on shareholder funds—beyond its current “mid teens or better” guidance when it announces annual results on Feb. 25. NatWest and Barclays are also expected to nudge their targets upward, according to sources familiar with the matter. Analysts suggest HSBC and Barclays could lift targets by as much as 200 basis points, or two percentage points. Peter Rothwell, head of banking at KPMG UK, highlighted the sector’s “earnings resilience” amid sustained high rates and tighter costs. Shore Capital’s Gary Greenwood noted the government will likely demand banks “grow their loan books faster,” which might lead to lower lending rates. (Reuters)
HSBC and four other leading British banks pledged a total of 11 billion pounds ($15 billion) in loans to support companies aiming to grow and invest overseas, following the government’s rollout of the program. Business and trade minister Peter Kyle emphasized that boosting exports hinges on firms having “the means, motive, and opportunity” to enter new markets. UK Export Finance will back up to 80% of qualifying loans. (Reuters)
Rates will be the next big mover. The Federal Reserve plans to drop its policy statement at 2 p.m. EST on Wednesday, with Chair Jerome Powell holding a news conference at 2:30 p.m., wrapping up a two-day meeting. (Federal Reserve)
Bank shares hinge on the trajectory of interest rates since it determines how much lenders make from the difference between depositor costs and borrower charges. If that gap tightens, hitting earnings targets becomes tougher.
HSBC’s move on Hang Seng sends a clear signal about its Asia strategy. The scheme of arrangement—a legal tool to buy out minority shareholders for cash—is paving the way for Hang Seng Bank to go fully private. Payments are slated for early February. (HSBC)
The bar is rising. Should rate cuts come sooner than banks anticipate, or if loan growth happens only with slimmer margins, investors might push harder on how those “mid-teen” returns hold up.
Upcoming catalysts are tight: Hang Seng Bank must delist by 4 p.m. HKT this Tuesday, the Fed will announce its decision on Jan. 28, and HSBC is set to release annual results on Feb. 25.
