LONDON, March 16, 2026, 14:10 GMT.
HSBC Holdings shares rose 0.6% to 1,187.4 pence by 11:23 UTC on Monday, even after the bank said it had closed some UAE branches until further notice and kept all but one Qatar branch shut. The move clawed back only a fraction of last week’s heavy slide. 1
HSBC has become a gauge of how traders are pricing Middle East disruption into European banks. JPMorgan said last week HSBC and Standard Chartered are the most exposed major European lenders to the region, estimating HSBC’s revenue and profit before tax, or PBT, exposure at about 4%, rising to nearly 9% when Egypt, Turkey and Saudi Arabia are included. 2
JPMorgan put HSBC’s Middle East lending exposure, largely in the UAE and Qatar, at about $23 billion, or 2% of its total loan book. Reuters reported on Thursday that HSBC’s shares had already fallen 14% since the Feb. 28 strikes on Iran, versus an 11.4% drop in Standard Chartered and a 9.5% slide in the STOXX Europe banks index. 2
Monday brought more strain on the ground. HSBC said some UAE branches would stay closed until further notice, although customer service centres in malls remain open, while Citigroup is keeping most UAE branches and offices shut indefinitely. 3
Even so, HSBC outperformed the sector on Monday. Europe’s banking index fell 0.6% and the STOXX 600 lost 0.3%, while the FTSE 100 was little changed as BP and Shell tracked oil above $100 a barrel. 4
“Given that the conflict is only two weeks old, policy will be on hold,” Jeremy Batstone-Carr, European strategist at Raymond James, said, adding that investors were waiting for fresh forecasts and clues from the Fed, ECB and Bank of England. For now, that has left bank stocks trading on macro signals as much as company news. 4
The arguments cut both ways. Morningstar equity analyst Kathy Chan said the uncertainty could create “additional risks” for trade finance — short-term lending tied to import and export flows — and for credit costs. Hargreaves Lansdown analyst Matt Britzman said the disruption could also lift demand for foreign exchange and cash management. 5
HSBC has tried to steady the message. Chief Executive Georges Elhedery said on March 9 that the bank’s “conviction in the GCC’s fundamentals and its future is unchanged” and called the Asia-Middle East corridor “a defining axis of global growth.” Reuters calculations from company figures showed HSBC’s UAE and Saudi businesses contributed about 5% of group profits annually over the past five years. 6
The stock also went into this month’s turmoil with momentum. On Feb. 25, HSBC lifted its target for return on tangible equity — a bank profitability measure — to 17% or better through 2028 after 2025 pretax profit beat estimates, helping cement the view that most of Elhedery’s overhaul is done. 7
But the downside is still easy to see. If oil stays above $100, airspace and shipping disruptions deepen, and more Gulf operations are curtailed, HSBC could face renewed pressure on trade flows and corporate lending even if credit losses stay contained. UBS Global Wealth Management last week cut European banks to “neutral,” saying sustained gains may be hard to hold even if energy flows normalise quickly. 4
