What’s New With HSBC Stock?

HSBC’s stock (NYSE: HSBC) fared reasonably well this year, rising by about 33% since early January.  This compares to rival  JP Morgan (NYSE: JPM) which remains up by about 25% over the same period. HSBC’s Q2 2025 results showed a mixed but resilient picture, with pre-tax profit coming in at $6.33 billion, down 29% year-over-year due to impairment charges on Bank of Communications, higher expected credit losses (ECL), and rising expenses. Revenues stood at $16.47 billion, slightly down year-over-year. So why is the stock doing so well?

Image by malcolm swallow from Pixabay

HSBC’s momentum is supported by strong growth in wealth and fee-based businesses, particularly in Asia, where brokerage, trading, asset management, and insurance revenues benefited from market volatility. Trading-related income remained resilient across foreign exchange, debt, and equity markets. Efficiency measures, including reorganization of business lines and geographic divisions, aim to deliver $1.5 billion in annual savings by 2026 and about $300 million in cost savings in 2025. The bank’s strategic pivot toward profitable Asian markets, while scaling back lower-return operations in Europe and the Americas, are also expected to sharpen returns.

HSBC is rolling out new wealth products and promotions, including incentives for fresh inflows, to attract premium clients. In Q2 2025, wealth income rose 22% year-over-year, driven by client acquisition and heightened activity in Hong Kong and India. As an aside, market leadership is in fact one of the factors we consider in constructing the market-beating Trefis High Quality portfolio (HQ) – a strategy of 30 stocks that targets long-term value creation. HQ has outperformed the S&P 500 and achieved returns greater than 91% since inception.

HSBC stock’s valuation remains reasonable, with the stock trading at about 1.2x tangible book value. HSBC is also doubling down on capital returns, announcing a $3 billion buyback in Q2 2025 and offering a dividend yield above 4%. These strong returns are underpinned by solid capital ratios, with a CET1 ratio of 14.6% – a key regulatory measure of core equity capital versus risk-weighted assets that signals the bank’s strong ability to absorb losses. HSBC is also targeting mid-teens return on tangible equity through 2025-2027,  which could drive long-term shareholder value. That said, external risks remain. U.S. tariffs could weigh on global trade and dampen loan demand for HSBC which has traditionally been more dependent on global trade compared to peers.

However, HSBC’s $1.7 trillion deposit base, deep client relationships, and robust capital position should help cushion the impact. On the earnings side, HSBC’s core net interest income (NII) could face some pressure if the Fed cuts rates in September. The bank earns roughly half its revenue from net interest income, and with its large U.S. dollar balance sheet, rate cuts would flow almost directly into lower lending margins. See our analysis of HSBC’s valuation for a closer look at what’s driving HSBC stock.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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