Investment Platform Analysis: HSBC

The majority of insider transactions over the past six months have been share purchases. This tends to reflect well on the health of the company, although it should not be viewed in isolation.

• Georges Elhedery – Chief Financial Officer
  Uninformative Buy, Grant/Award/Other Acquisition – 29,498 shares
• Noel Quinn –  Chief Executive Officer
  Uninformative Buy, Grant/Award/Other Acquisition – 46,219 shares
• Colin Bell – Divisional Chief Executive Officer
  Informative Sell –  174,612 shares
• Michael Roberts – Country Chief Executive
  Uninformative Buy, Auto Buy – 24,118 shares
• Nuno Matos – Divisional Chief Executive Officer
  Uninformative Buy, Auto Buy – 9,873 shares
• David Liao – Subsidiary Chief Executive Officer
  Uninformative Buy, Auto Buy – 19,644 shares
• Georges Elhedery – Chief Financial Officer
  Uninformative Buy, Auto Buy – 26,899 shares
• Noel Quinn – Chief Executive Officer
  Uninformative Buy, Auto Buy – 42,146 shares
• Michael Roberts – Country Chief Executive
  Uninformative Buy, Auto Buy – 21,917 shares
• Nuno Matos – Divisional Chief Executive Officer
  Uninformative Buy, Auto Buy – 9,426 shares

HSBC has over $3 trillion of invested assets globally and over $1.2 trillion of invested assets within its Wealth business segment. Approximately 50% of these assets are invested in Asia, highlighting the company’s tilt towards high-growth markets.

Not all of these assets concern HSBC’s investment platform clients. The bank does not publish the amount of money held on its investment platform or within ISA accounts.

As of March 2024, HSBC had $712 billion of assets under management (AUM) globally. These assets are managed for a range of clients, including financial intermediaries, retail, and private banking clients.

Number of users vs previous year and quarter.
HSBC doesn’t provide quarterly updates for the number of customers using its investment and ISA platforms. However, it claims that over 300,000 people in the UK already invest with the bank.

ETF business vs previous year and quarter.
In recent years, HSBC Asset Management’s Exchange Traded Fund (ETF) and indexing business has grown significantly. As of March 2024, AUM surpassing $100 billion. This includes $37 billion specifically in ETF assets, marking a fourfold increase since the end of 2019.

Revenue vs previous year vs consensus estimates.

Revenue generation has improved across the business through to 2023 when higher interest rates in key Western markets drove net interest margins higher. However, according to data from FactSet, revenue is set to fall in 2024.

Earnings per share (EPS) vs previous year vs consensus estimates.

Earnings Per Share (EPS) has surged since the pandemic with higher interest rates driving earnings across the business. EPS is expected to remain elevated in 2024 according to data from FactSet.

Return on equity vs previous year and quarter vs consensus estimates

Return on Equity (RoE) is an important metric for understanding the profitability of banks. RoE has improved significantly since the pandemic, reflecting an improving macroeconomic environment as well as higher interest rates.
Net interest margin vs previous year and quarter vs consensus estimates

The net interest margin (NIM) is a measure of profitability and is the difference between the interest income generated from loans and other interest-earning assets and the interest paid on deposits and other borrowings.

HSBC’s NIM has risen since 2021, but slower than other Western-focused banks due to HSBC’s exposure to China. China’s loan prime rate has followed a different trajectory to the Bank of England and Federate Reserve rate.

Analysts’ price targets and ratings including commentary.

Based on 18 analysts offering 12-month price targets for HSBC in the last 3 months. The average price target is $10.26 with a high forecast of $12.34 and a low forecast of $8.35.