HSBC Holdings plc (0005) Initial view from seminars; well positioned to capitalise on structural Asia trends

Research evidence excerpt

HSBC Holdings plc (0005) Initial view from seminars; well positioned to capitalise on structural Asia trends

Katherine Lei Asia Pacific Equity Research

(852) 2800-8552 22 May 2026

katherine.lei@jpmorgan.com

• Hang Seng Bank growth opportunities: HSB (3.3M Retail customers,

100k business customers in HK) growth opportunities are focused in 3

main areas: 1) Expanding the Retail customer base through digitalisation

and a greater presence in HK, whereby the Group’s Prestige & Prestige

Private customer base represents c60% of Retail revenues and has seen

+9% customer growth CAGR ‘23-25 with >50% of customer acquisition

coming from Mainland China; 2) Wealth (c20% of HSB revenues) where

fee income has grown +23% CAGR ‘23-25; 3) Commercial, focused on

China-linked client acquisitions (which already represents c30% of

acquisitions and generate 2x revenue per customer), and a wider product

range through Transaction Banking and Wealth.

Investment Thesis

HSBC’s self-help programs in the past decade have lifted normalized and through-the-cycle RoTE from 8% to 17%. This

means that the adjusted dividend yield (including share buybacks [SBB]) will stay at ~8% after the rate cycle, on our

estimates. Despite a three-quarter suspension in buybacks due to the HSB privatization, we estimate HSBC’s 2026-28 total

shareholder return yield at 8-10% each year, the highest within our bank sector coverage in the Greater China region. We

see declines in revenue in the medium term as a result of business disposals as well as rate cuts and loan growth also under

pressure, but fee income will likely provide some support, given strong momentum in Transaction Banking and Wealth.

The group’s restructuring plan could benefit on the cost side, depending on scale. We expect 2026/27/28 RoTE (excluding