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HSBC Holdings

LSE:HSBA
Snowflake Description

Excellent balance sheet with moderate growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
HSBA
LSE
£149B
Market Cap
  1. Home
  2. GB
  3. Banks
2018/02/22
Company description

HSBC Holdings plc provides banking and financial products and services. More info.


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3 Month History
HSBA
Industry
5yr Volatility vs Market

Value

 Is HSBC Holdings undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of HSBC Holdings to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of HSBC Holdings is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for HSBC Holdings's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are HSBC Holdings's earnings available for a low price, and how does this compare to other companies in the same industry?
  • HSBC Holdings is overvalued based on earnings compared to the GB Banks industry average.
  • HSBC Holdings is overvalued based on earnings compared to the GB market.
Price based on expected Growth
Does HSBC Holdings's expected growth come at a high price?
  • HSBC Holdings is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on HSBC Holdings's assets?
  • HSBC Holdings is overvalued based on assets compared to the GB Banks industry average.
X
Value checks
We assess HSBC Holdings's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Banks industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Banks industry average (and greater than 0)? (1 check)
  5. HSBC Holdings has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (34.72%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (Excess Returns Model)

The calculations below outline how an intrinsic value for HSBC Holdings is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.

In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.

The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.

Note the calculations below are per share.

See our documentation to learn about this calculation.



Value of Excess Returns

Excess Returns = (Stable Return on equity – Cost of equity) (Book Value of Equity per share)

$-0.05 = (8.45% – 9%) * $9.08)

Terminal Value of Excess Returns = Excess Returns / (Cost of Equity - Expected Growth Rate)

$-0.66 = $-0.05 / (9% - 1.49%)

Value of Equity = Book Value per share + Terminal Value of Excess Returns

$8.42 = $9.08 + $-0.66

Inputs used in model:

Stable EPS = Stable Book Value * Return on Equity
$0.77 = $9.08 * 8.45%
Source: Weighted future Return on Equity estimates from 15 analysts.

Book Value of Equity per Share: $9.08
Source: Weighted future Book Value estimates from 10 analysts.

Expected Growth Rate: 1.49%
Source: Risk Free Rate/ 10 year Government Bond Rate in GBP.

Discount to Share Price

Value per share (USD): $8.42

Exchange rate USD/GBP = 0.717

Value per share (GBP): £6.04

Current discount (share price of £7.28): -20.59%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 9% = 1.49% + (0.883 * 8.51%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (£149,219,049,226).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

0.883 = 0.292 (1 + (1- 19%) (249.89%))

Levered Beta used in calculation = 0.883



Assumptions
  1. The risk free rate of 1.49% is from the 10 year government bond rate in GBP.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (8.51%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is HSBC Holdings expected to perform in the next 1 to 3 years based on estimates from 15 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
13.5%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is HSBC Holdings expected to grow at an attractive rate?
  • HSBC Holdings's earnings growth is expected to exceed the low risk savings rate of 4.5%.
Growth vs Market Checks
  • HSBC Holdings's earnings growth is expected to exceed the GB market average.
  • HSBC Holdings's revenue growth is expected to exceed the GB market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • HSBC Holdings's earnings are expected to grow by 13.5% yearly, however this is not considered high growth (20% yearly).
  • HSBC Holdings's revenue is expected to grow by 6.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • HSBC Holdings is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
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Future performance checks
We assess HSBC Holdings's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the GB market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the GB market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
HSBC Holdings has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has HSBC Holdings performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare HSBC Holdings's growth in the last year to its industry (Banks).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • HSBC Holdings's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
  • HSBC Holdings's 1-year earnings growth exceeds its 5-year average (645.4% vs -15.2%)
  • HSBC Holdings's earnings growth has exceeded the GB Banks industry average in the past year (645.4% vs 16.6%).
Earnings and Revenue History
HSBC Holdings's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • HSBC Holdings has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • HSBC Holdings used its assets less efficiently than the GB Banks industry average last year based on Return on Assets.
  • HSBC Holdings's use of capital has not improved over the past 3 years (Return on Capital Employed).
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Past performance checks
We assess HSBC Holdings's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Banks industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
HSBC Holdings has a total score of 2/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is HSBC Holdings's financial position? (This company is analysed differently as a bank or financial institution)

This company is a bank or financial institution.

Fundamentally a bank's business is based upon borrowing and lending money, for this reason they typically have high levels of debt and we analyse them differently.
Net Worth
Balance sheet
This treemap shows a more detailed breakdown of HSBC Holdings's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
BANK ANALYSIS

This company is a bank or financial institution, which is analysed accordingly below.

Below we check the amount of loans the bank has, how many of those are bad, and its ability to cover any bad loans.
  • HSBC Holdings has an acceptable proportion of non-loan assets held.
  • HSBC Holdings's liabilities are made up of primarily low risk sources of funding.
  • Loans at HSBC Holdings are broadly funded by customer deposits.
  • HSBC Holdings's level of assets compared to its equity is moderate (i.e. an appropriate level of borrowing to fund lending).
  • HSBC Holdings has a low allowance for bad loans.
  • HSBC Holdings has an acceptable level of bad loans (less than 2%).
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Financial health checks
We assess HSBC Holdings's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. HSBC Holdings has a total score of 5/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is HSBC Holdings's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
5%
Current annual income from HSBC Holdings dividends. Estimated to be 5.13% next year.
If you bought £2,000 of HSBC Holdings shares you are expected to receive £100 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • HSBC Holdings's dividend is above the low risk savings rate (2.3%).
  • HSBC Holdings's dividend is above the markets top dividend payers (3.98%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have fallen over the past 10 years.
Current Payout to shareholders
What portion of HSBC Holdings's earnings are paid to the shareholders as a dividend.
  • Dividends paid are not well covered by net profit (1x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by net profit (1.6x coverage).
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Income/ dividend checks
We assess HSBC Holdings's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can HSBC Holdings afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. HSBC Holdings has a total score of 3/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of HSBC Holdings's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
John Flint, image provided by Google.
John Flint
AGE 48
TENURE AS CEO 0 years
CEO Bio

Mr. John Michael Flint has been Group Chief Executive of HSBC Holdings plc since February 21, 2018 and serves as its Member of Group Management Board. Mr. Flint was the Chief Executive of Retail Banking & Wealth Management at HSBC Holdings plc since January 1, 2013 until January 31, 2018 and its its Group Managing Director since December 2012. He served as Group Group Head of Strategy & Planning and Chief of Staff at HSBC Holdings plc from January 2012 to December 31, 2013. He served as the Chief Executive Officer of HSBC Global Asset Management (UK) Limited until December 2011. He served as the Chief Executive Officer of HSBC Global Asset Management Arm from January 2010 to December 2011. He served as the Chief Executive of Global Asset Management, Group General Manager, Deputy Head of Global Markets and Group Treasurer at HSBC Bank Plc. He joined HSBC in 1989. He served at HSBC in Asia helping to establish and expand the HSBC Global Markets business in the region and served as the Regional Head of Balance Sheet Management for the Europe, Middle East and Africa Region since 2004. He served as the Group Treasurer and assumed global responsibility for balance sheet management at HSBC since 2006. He served as Director of HSBC Bank Canada since February 2012. He served as a Non Executive Director of HSBC Global Asset Management (Hong Kong) Ltd until January 06, 2012. He is a Member of the Institute of International Finance Market Monitoring Group. He was appointed as a director of The HongKong and Shanghai Banking Corporation Limited on 16 January 2018. He holds a B.Sc (Hons) in Economics.

CEO Compensation
  • HSBC Holdings has a new CEO, we can't show their compensation history.
Management Team Tenure

Average tenure and age of the HSBC Holdings management team in years:

5.3
Average Tenure
55
Average Age
  • The average tenure for the HSBC Holdings management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Iain Mackay

TITLE
Group Finance Director & Executive Director
COMPENSATION
$3M
AGE
55
TENURE
7.2 yrs

Menasey Moses

TITLE
Group Chief Risk Officer & Executive Director
COMPENSATION
$3M
AGE
59
TENURE
7.2 yrs

John Flint

TITLE
Group Chief Executive
AGE
48

Peter Wong

TITLE
Group MD & Member of the Group Management Board
AGE
66

Peter Boyles

TITLE
Group MD
AGE
62
TENURE
4.3 yrs

Samir Assaf

TITLE
Group MD
AGE
57

Pat Burke

TITLE
Group MD & Member of the Group Management Board
AGE
55
TENURE
2.5 yrs

Antonio P. Simoes

TITLE
Group MD & Member of Group Management Board
AGE
42

Stuart Levey

TITLE
Chief Legal Officer
AGE
53
TENURE
6.1 yrs

Manveen Kaur

TITLE
Group Head of Internal Audit
AGE
53
TENURE
4.8 yrs
Board of Directors Tenure

Average tenure and age of the HSBC Holdings board of directors in years:

3.4
Average Tenure
57.4
Average Age
  • The tenure for the HSBC Holdings board of directors is about average.
Board of Directors

Mark Tucker

TITLE
Non-Executive Group Chairman of the Board
COMPENSATION
$818K
AGE
60
TENURE
0.3 yrs

Iain Mackay

TITLE
Group Finance Director & Executive Director
COMPENSATION
$3M
AGE
55
TENURE
7.2 yrs

Menasey Moses

TITLE
Group Chief Risk Officer & Executive Director
COMPENSATION
$3M
AGE
59
TENURE
4.1 yrs

John Flint

TITLE
Group Chief Executive
AGE
48

Andy Maguire

TITLE
Chairman of Advisory Board
AGE
50
TENURE
1.1 yrs

Digby Jones

TITLE
Head of International Business Advisory Board
AGE
61

Laura Cha

TITLE
Independent Non-Executive Director
COMPENSATION
$291K
AGE
67
TENURE
6.9 yrs

Evans of Weardale Evans

TITLE
Independent Non-Executive Director
COMPENSATION
$223K
AGE
59
TENURE
4.5 yrs

Jonathan Symonds

TITLE
Senior Independent Non-Executive Director
COMPENSATION
$641K
AGE
58
TENURE
0.8 yrs

Pauline F. van der Meer Mohr

TITLE
Independent Non-Executive Director
COMPENSATION
$255K
AGE
57
TENURE
2.4 yrs
Recent Insider Trading
  • More shares have been bought than sold by HSBC Holdings insiders in the past 3 months, but not in substantial volumes.
Who owns this company?
X
Management checks
We assess HSBC Holdings's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. HSBC Holdings has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

External News
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Simply Wall St News

What You Must Know About HSBC Holdings plc's (LON:HSBA) 3.79% ROE

HSBC Holdings plc (LSE:HSBA) generated a below-average return on equity of 3.79% in the past 12 months, while its industry returned 7.09%. … Check out our latest analysis for HSBC Holdings Peeling the layers of ROE – trisecting a company’s profitability Firstly, Return on Equity, or ROE, is simply the percentage of last years’ earning against the book value of shareholders’ equity. … The most recent ratio is 246.76%, which is relatively high, indicating HSBC Holdings’s below-average ROE is already being pushed up artificially by leverage and its ability to grow profit hinges on a sizeable debt burden.

Simply Wall St -

What Does HSBC Holdings plc's (LON:HSBA) Ownership Structure Look Like?

LSE:HSBA Insider_trading Feb 12th 18 General Public Ownership The general public holds a substantial 47.14% stake in HSBA, making it a highly popular stock among retail investors. … With this size of ownership, retail investors can collectively play a role in major company policies that affect shareholders returns, including executive remuneration and the appointment of directors. … Thus, investors not need worry too much about the consequences of these holdings.Next Steps: HSBA's considerably high level of institutional ownership calls for further analysis into its margin of safety.

Simply Wall St -

What Is HSBC Holdings plc's (LON:HSBA) Share Price Doing?

Let’s take a look at HSBC Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. … It’s trading around 12% above my intrinsic value, which means if you buy HSBC Holdings today, you’d be paying a relatively fair price for it. … It seems like the market has already priced in HSBC Holdings’s positive outlook, with shares trading around its fair value.

Simply Wall St -

How Does HSBC Holdings plc (LON:HSBA) Fare As A Dividend Stock?

HSBC Holdings plc (LSE:HSBA) has returned to shareholders over the past 10 years, an average dividend yield of 6.00% annually. … Check out our latest analysis for HSBC Holdings 5 questions I ask before picking a dividend stock If you are a dividend investor, you should always assess these five key metrics: Is it the top 25% annual dividend yield payer? … In terms of its peers, HSBC Holdings generates a yield of 6.47%, which is high for banks stocks.Next Steps: Whilst there are few things you may like about HSBC Holdings from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor.

Simply Wall St -

Is Now The Right Time To Buy HSBC Holdings plc (LON:HSBA)?

HSBC Holdings is trading at price-to-earnings (PE) ratio of 38.98x, this tells us the stock is overvalued compared to the GB market average ratio of 18.26x , and overvalued based on current earnings compared to the banks industry average of 16.9x. … Based on HSBC Holdings's predicted 137.57% growth in earnings next year and PE ratio of 38.98x we see that HSBC Holdings has a quite high PEG ratio of 2.74x. … So when we include the growth factor in our analysis HSBC Holdings appears overvalued , based on the fundamentals.

Simply Wall St -

Does HSBC Holdings plc's (LON:HSBA) PE Ratio Signal A Selling Opportunity?

Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for HSBA Price per share = $10.38 Earnings per share = $0.278 ∴ Price-Earnings Ratio = $10.38 ÷ $0.278 = 37.3x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … For example, if you are inadvertently comparing riskier firms with HSBA, then HSBA’s P/E would naturally be higher than its peers since investors would reward its lower risk with a higher price. … If this assumption does not hold true, HSBA’s higher P/E ratio may be because firms in our peer group are being undervalued by the market.

Simply Wall St -

Can HSBC Holdings plc (LON:HSBA) Survive The Next Financial Crisis?

Though banks are required to have a certain level of buffer to meet its capital requirements, HSBC Holdings’s leverage level of less than the suitable maximum level of 20x, at 13x, is considered to be very cautious and prudent. … Compared to the appropriate industry loan to deposit level of 90%, HSBC Holdings’s ratio of over 73.56% is sensibly lower and within the safe margin, which positions the bank cautiously in terms of liquidity as it has not disproportionately lent out its deposits and has retained an apt level of deposits.Conclusion HSBC Holdings meets all of our liquidity and leverage criteria, exhibiting operational prudency. … High liquidity and low leverage places the bank in an ideal position to repay financial liabilities in case of adverse headwinds.

Simply Wall St -

With 52.2% Earnings Growth Lately, Did HSBC Holdings plc (LON:HSBA) Outperform The Industry?

Below, I will run you through a simple sense check to build perspective on how HSBC Holdings is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its banks industry peers. … HSBC Holdings's latest earnings is $5,517.0M, which, in comparison to the prior year's figure, has moved up by a non-trivial 59.27%. … Although revenue growth in the past couple of years, has been negative, earnings growth has been deteriorating by even more, meaning HSBC Holdings has been increasing its expenses.

Simply Wall St -

Real Risks You Need To Know Before Investing In HSBC Holdings plc (LON:HSBA)

Check out our latest analysis for HSBC Holdings LSE:HSBA Historical Debt Dec 12th 17 What Is An Appropriate Level Of Risk? … If it writes off more than 100% of the bad debt it provisioned for, then it has poorly anticipated the factors that may have contributed to a higher bad loan level which begs the question – does HSBC Holdings understand its own risk?. … Since HSBC Holdings’s total deposit to total liabilities is within the sensible margin at 60.44% compared to other banks' level of 50%, it shows a prudent level of the bank's safer form of borrowing and an appropriate level of risk.Conclusion HSBC Holdings has maintained a safe level of deposits against its liabilities.

Simply Wall St -

Investors In HSBC Holdings plc (LSE:HSBA) Are Paying Above The Intrinsic Value

Emphasizing elements like book values, on top of the return and cost of equity, is practical for evaluating HSBA’s true value. … The returns in excess of cost of equity is called excess returns: Excess Return Per Share = (Stable Return On Equity – Cost Of Equity) (Book Value Of Equity Per Share) = (8.63% – 8.33%) * $9.69 = $0.03 Excess Return Per Share is used to calculate the terminal value of HSBA, which is how much the business is expected to continue to generate over the upcoming years, in perpetuity. … This is a common component of discounted cash flow models: Terminal Value Per Share = Excess Return Per Share / (Cost of Equity – Expected Growth Rate) = $0.03 / (8.33% – 1.49%) = $0.39 These factors are combined to calculate the true value of HSBA's stock: Value Per Share = Book Value of Equity Per Share + Terminal Value Per Share = $9.69 + $0.39 = £6.87 Given HSBA's current share price of $7.33, HSBA is , at this time, trading in-line with its true value.

Simply Wall St -

Company Info

Map
Description

HSBC Holdings plc provides banking and financial products and services. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments. The Retail Banking and Wealth Management segment offers personal banking products and services, mortgages and loans, credit cards, insurance and investment products, savings products, international services, and wealth solutions and financial planning services, as well as telephone, Internet, and mobile banking services. The Commercial Banking segment provides services and financing for buyers and suppliers throughout the trade cycle; liquidity and cash management services; capital financing, including debt, equity, and advisory services; and insurance and investment products, such as business and financial protection, trade insurance, employee benefits, corporate wealth management, and other commercial risk insurance products to small enterprises, mid-market companies, and multinationals. The Global Banking and Markets segment is involved in the provision of advisory, financing, prime, research and analysis, securities, trading and sales, and transaction banking services to corporates, financial institutions, and resources and energy groups. The Global Private Banking segment provides private banking, and investment and wealth management services to business owners, entrepreneurs, and senior executives and their families. The company operates through approximately 3,900 offices in 67 countries and territories worldwide. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

Details
Name: HSBC Holdings plc
HSBA
Exchange: LSE
Founded: 1865
£149,219,049,226
19,967,757,156
Website: http://www.hsbc.com
Address: HSBC Holdings plc
8 Canada Square,
London,
Greater London, E14 5HQ,
United Kingdom
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
LSE HSBA Ordinary Shares USD 0.50 London Stock Exchange GB GBP 08. Apr 1991
OTCPK HBCY.F Ordinary Shares USD 0.50 Pink Sheets LLC US USD 08. Apr 1991
DB HBC1 Ordinary Shares USD 0.50 Deutsche Boerse AG DE EUR 08. Apr 1991
XTRA HBC1 Ordinary Shares USD 0.50 XETRA Trading Platform DE EUR 08. Apr 1991
SEHK 5 Ordinary Shares USD 0.50 The Stock Exchange of Hong Kong Ltd. HK HKD 08. Apr 1991
SHSC 5 Ordinary Shares USD 0.50 Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect HK HKD 08. Apr 1991
SZSC 5 Ordinary Shares USD 0.50 The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect HK HKD 08. Apr 1991
ENXTPA HSB Ordinary Shares USD 0.50 Euronext Paris FR EUR 08. Apr 1991
BER HSBC.BH Ordinary Shares USD 0.50 The Bermuda Stock Exchange BM USD 08. Apr 1991
BATS-CHIXE HSBAL Ordinary Shares USD 0.50 BATS 'Chi-X Europe' GB GBP 08. Apr 1991
BATS-CHIXE HSBP Ordinary Shares USD 0.50 BATS 'Chi-X Europe' GB EUR 08. Apr 1991
NYSE HSBC SPON ADR NEW New York Stock Exchange US USD 26. Apr 1991
NYSE HSEA SUB CAP 8.125% New York Stock Exchange US USD 03. Apr 2008
DB HBC2 SPON ADR NEW Deutsche Boerse AG DE EUR 26. Apr 1991
XTRA HBC2 SPON ADR NEW XETRA Trading Platform DE EUR 26. Apr 1991
BMV HBC N SPON ADR NEW Bolsa Mexicana de Valores MX MXN 26. Apr 1991
Number of employees
Current staff
Staff numbers
228,687
HSBC Holdings employees.
Industry
Diversified Banks
Banks
Company Analysis and Financial Data Status
Area Date
Company Analysis updated: 2018/02/22
Last estimates confirmation: 2018/02/22
Last earnings update: 2017/12/31
Last annual earnings update: 2017/12/31


All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.