VALUATION HIGHLIGHTS

1. Commercial Banking constitutes 40% of the Trefis price estimate for HSBC's stock.
2. Retail Banking & Wealth Management constitutes 37% of the Trefis price estimate for HSBC's stock.
3. Investment Banking constitutes 13% of the Trefis price estimate for HSBC's stock.

WHAT HAS CHANGED?

Latest Earnings Q3'2025

HSBC's Q3 2025 results were driven by a 3% increase in revenue to $17.9 billion, supported by strong growth in wealth management fees, net interest income, and wholesale transaction banking. However, pre-tax profit fell 14% to $7.3 billion, impacted by legal provisions and higher credit losses.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of HSBC's value that present opportunities for upside or downside to the current Trefis price estimate for HSBC:

Investment Banking

• Advisory, Underwriting & Financing Revenues : HSBC generated $3 billion in fee revenues from its M&A advisory, debt & equity underwriting, as well as other capital financing services in 2022 and 2023. The metric grew to $3.3 billion in 2024. We forecast the figure to grow to $3.7 billion over our forecast period. However, if these revenues were to decline to $3 billion by the end of our review period due to a reduction in the bank's share of the global capital markets, then this would mean a downside of 3% to the Trefis price estimate.
• Global Banking & Markets Division Operating Margin : HSBC's Global Banking & Markets division encompasses the bank's investment banking, treasury, and custody banking services, and is responsible for approximately 35% of its total pre-tax profits. The figure was almost 37% in 2023 and rose to 40% in 2024. While we forecast margins of around 44% for the division by the end of our Trefis forecast period, decreased profitability from stricter regulatory requirements could potentially push this figure to as low as 30%. This would represent a downside of 6% to the Trefis price estimate.

For additional details, select a driver above or a division from the interactive Trefis split for HSBC at the top of the page.

BUSINESS SUMMARY

HSBC is one of the world's largest banking and financial services organizations, providing individuals, corporations, governments, and institutions in over 60 countries with financial products and services ranging from retail banking, credit cards, corporate and investment banking, custody banking, and wealth management. HSBC earns most of its profits from its operations in Asia, especially in Hong Kong.

Diversified Business Model Driving Sustained Growth

HSBC is a market leader in nearly every financial service, including retail banking, commercial banking, investment banking, wealth management, and custody banking. The diversified business model and the bank's strong global presence allow HSBC to provide its individual and institutional customers with a wider range of services. Moreover, the business model also brings in significant cross-selling opportunities that are not readily available to its competitors.

KEY TRENDS

HSBC’s Shift Toward Asia Continues

HSBC has been restructuring its global operations to focus on more profitable markets. The bank has scaled back or exited businesses in the U.S. and Latin America while doubling down on its core markets in Asia, particularly Hong Kong and China. Wealth management and commercial banking remain key growth areas.

Wealth Management Expansion

HSBC is expanding its wealth management services in Asia, aiming to capture more high-net-worth clients. While global economic uncertainty and China’s property sector struggles have created some near-term challenges, long-term tailwinds, such as aging populations in mature markets and growing wealth in emerging economies, are likely to drive demand for private banking and investment services. The shift also ties into the bank's strategy of doubling down on fee-based products.