Brokerages positive of UK banks' revenue growth momentum; upgrades HSBC, StanChart

Global Brokerage

17/09/2021 07:43

** Barclays double-upgrades London-listed shares of HSBC
Holdings  HSBA.L  to "overweight" from "underweight" with a
greater conviction on an improving outlook
    ** Brokerage also upgrades peer Standard Chartered Plc
 STAN.L  to "equal weight" from "underweight"
    ** Barclays expects to see a reacceleration in both the
firms' revenue momentum from 2022 with an eventual China border
re-opening
    ** Also, targeted investment and structural growth would
allow both banks to deliver early on their double-digit revenue
growth ambitions, adds brokerage
    ** Brokerage had long been cautious on both the banks'
revenue growth given various headwinds, but now, with
rates-driven margin pressure overcome, it expects the firms' net
interest income to benefit from accelerating loan growth
    ** China policy developments are driving weak valuations,
limiting downside risk and under-appreciating sizable upside
potential for both the firms, Barclays says
    ** Raises PT on HSBA to 530p from 480p and on STAN to 550p
from 490p
    ** Separately, RBC also upgrades HSBA to "outperform" from
"sector perform", raises PT to 460p from 450p
    ** RBC sees the bank's current share price as a good entry
point and expects interest rate rises to materialise, boosting
co's FY23 revenue by ~2.4%
    ** HSBA up 2% and STAN down 5.3% this year, as of their last
close

 (Reporting by Tapanjana Rudra)
 ((Tapanjana.Rudra@thomsonreuters.com;))