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HSBC Holdings HSBC shares touched a five-year high of $49.46 during Thursday's trading session. Year to date, the stock has risen 21.5%, outperforming the industry’s jump of 7.8%.
In the same time frame, HSBC’s peer, UBS Group AG UBS, has declined 0.9%, while Barclays BCS shares have skyrocketed 70.5%.
Year-to-Date Price Performance
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Technical indicators suggest strength for HSBC. The stock is trading above its 50-day and 200-day moving averages. It signals robust upward momentum and price stability for HSBC. This underscores positive market sentiments and confidence in the company's financial health and prospects as it continues its Asia pivot strategy and simplifies global operations.
50-Day & 200-Day Moving Averages
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HSBC has been aggressively restructuring its global footprint to reduce costs and complexity. The company intends to position itself as a top bank for high-net-worth and ultra-high-net-worth clients in Asia.
In sync with this, last week, HSBC announced a deal to divest its French life insurance arm, HSBC Assurances Vie (France), to Matmut Société d’Assurance Mutuelle. Also, in September 2024, the company agreed to sell its private banking business in Germany to BNP Paribas and its South Africa business to FirstRand Bank and Absa. In April 2024, the company announced an agreement to divest its Argentina business, while in February, HSBC agreed to sell its Armenian unit. The company already exited retail banking businesses in the United States, Canada, France, New Zealand, Greece and Russia.
HSBC intends to reinvest the proceeds from the divestitures in expanding its presence in Southeast Asia and China, where the bank believes it can leverage its existing strengths to drive growth. As such, the company acquired Citigroup's retail wealth management business in China and Singapore-based SilkRoad Property Partners Group. Also, it has relaunched its private banking business in India.
HSBC is simplifying its organizational structure into four businesses (Hong Kong, UK, Corporate & Institutional Banking and International Wealth & Premier Banking), enabling it to quickly deliver on its strategic priorities. This move aims to mitigate the overlapping processes and decision-making integrated into the existing structure, leading to rapid execution. Similar steps are being taken by BCS and UBS too. Both lenders are trying to focus on core businesses to drive profitability.
Despite the uncertain macroeconomic environment, HSBC’s capital position remains robust. Given the solid capital position and lower debt-equity ratio compared with the industry, the company consistently rewards shareholders. HSBC expects a dividend payout ratio of 50% (excluding the impacts of acquisitions and disposals) for 2024. Further, it intends to initiate a share buyback of up to $3 billion, which will be completed by February 2025.