What's New With HSBC Stock?

Core Viewpoint - HSBC's stock has shown a solid performance over the past year, with a 33% increase since the start of 2024, although it still lags behind competitors like Barclays and JP Morgan [1] Financial Performance - In Q3 2024, HSBC reported pre-tax profits of $8.5 billion, a 6% increase year-over-year, while revenues rose by 5% to $17 billion [2] - The bank's net interest income fell to $7.6 billion, down $1.6 billion from the previous year, primarily due to lower interest rates and business disposals [2] - HSBC's deposit base stands at $1.7 trillion, which previously benefited from elevated interest rates in 2023 [2] Growth Drivers - HSBC is increasingly focusing on fee-based products, particularly in its Wealth and Personal Banking division, where wealth fees and other income rose by 32% year-over-year on a constant currency basis [3] - The Global Private Banking segment has performed well, driven by strong brokerage and trading activity in Asia, alongside rising asset management revenues [3] Stock Attractiveness - HSBC has consistently increased its stock value over the last four years, with returns of 21% in 2021, 8% in 2022, 39% in 2023, and 34% in 2024 [4] - The stock is currently trading at about 1x tangible book value, indicating reasonable valuation [4] - HSBC has announced a $3 billion share buyback, contributing to a total of $9 billion in buybacks over the first nine months of 2024, which may support the stock price [4] - The bank is targeting a mid-teens return on average tangible equity for 2024 and 2025, which is above the industry average [4]