Core Insights - HSBC Holdings PLC and Barclays PLC are focusing on streamlining operations to enhance efficiency and concentrate on core businesses [1][2] HSBC Overview - HSBC is implementing a $1.5 billion cost-saving plan aimed at organizational simplification by 2026, with expected total severance and upfront charges of $1.8 billion [3] - The bank is winding down non-core operations in various regions while maintaining a focused presence in Asia and the Middle East, including divestments in multiple countries [4] - HSBC is expanding its wealth management business in Asia, particularly in China and India, through acquisitions and branch openings [5][6] - Despite these initiatives, HSBC's revenue generation has been subdued due to a challenging macroeconomic environment and weak loan demand [7] Barclays Overview - Barclays is simplifying operations and focusing on core businesses, including the sale of its stake in Entercard Group for $273 million and a collaboration with Brookfield to enhance its payment acceptance business [8] - The bank has made several acquisitions and divestments to bolster its lending capacity and mortgage business, including the acquisition of Tesco's retail banking business and the sale of $1.1 billion in credit card receivables [9] - Barclays has achieved gross savings of £1 billion in 2024 and aims for total gross efficiency savings of £2 billion by the end of 2026 [10] Performance Comparison - Year-to-date, Barclays' stock has increased by 52.8%, outperforming HSBC's 39.4% gain and the industry's 39.7% rally [12] - In terms of valuation, HSBC has a price/tangible book (P/TB) ratio of 1.30X, while Barclays has a lower P/TB ratio of 0.79X, indicating that Barclays is relatively inexpensive [14] Earnings Estimates - The Zacks Consensus Estimate for HSBC's 2025 earnings suggests a 7.4% year-over-year increase, while Barclays' estimates indicate growth of 22.3% for 2025 [17][21] - Analysts have revised HSBC's earnings estimates upward, indicating more optimism regarding its growth potential compared to Barclays [23] Investment Outlook - Barclays' restructuring efforts and capital redeployment are expected to lead to sustained profitability, while HSBC's strategic pivot to Asia may yield significant long-term gains [22] - HSBC's disciplined exit strategy and cost-saving plan are anticipated to improve returns, making it a more attractive investment option compared to Barclays [23][24]