HSBC price plummets as global economic disruptions take its toll

Following on from full year results, the bank leads the FTSE 100 fallers.

Article updated: 19 February 2019 2:00pm Author: Graham Spooner

  • Lagging China, concerns over trade talks and Brexit uncertainty drive profits and revenues lower than estimates.
  • Increasing focus on Asian markets and an attractive dividend yield stands firm for investors.
  • We maintain a medium risk “buy” for an income geared portfolio.

HSBC leads the FTSE 100 fallers list this morning following on from full year & fourth quarter results, which highlighted concerns over the US/China trade talks, a slowing Chinese economy and Brexit.

For the year, profits and revenues were lower than estimates at $21.7 billion and $53.8 billion respectively. Getting a grip on the group’s costs is another area of concern and the bank suffered over the final quarter when clients held off doing business over the period due to more challenging market conditions and a weaker economic outlook, meaning its target of a rise in income to be greater than a rise in costs was missed.

The bank has moved its focus increasingly towards Asia in recent years and makes the majority of its profits from the region. The comparatively new CEO and his pivot to Asia plan hopes to benefit on the faster potential growth.

The attractive dividend yield of around 5.9% has been a focus for many private investors and they will note that the dividend has been held at lasts year’s levels. The tone of the results suggests that for the short to medium term, the yield could be the main attraction.
We maintain a medium risk “buy” for an income geared portfolio.


All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Graham Spooner portrait photo
Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.