LONDON, March 27, 2026, 13:07 GMT
HSBC Holdings Plc slipped in London on Friday, leaving the stock under pressure as a broader selloff in UK equities deepened on worries about the Middle East war. By 1250 GMT, HSBC was down 0.45% at 1,192.2 pence, after ending Thursday 1.14% lower at 1,197.6 pence, while the FTSE 100 was off 0.7% at 1125 GMT. 1
The move matters because HSBC now sits at the centre of two fast-moving stresses: rising funding costs in Britain and the bank’s exposure to Gulf markets. Finance minister Rachel Reeves called HSBC and other big lenders in on Thursday, and the Treasury said the banks would contact 1.6 million customers whose fixed-rate mortgages expire by year-end; Reuters reported this week that the average two-year fixed mortgage rate has jumped to 5.51% from 4.83% since Feb. 28, with about 21% of mortgage products withdrawn. 2
J.P. Morgan cautioned earlier this month that HSBC and Standard Chartered are the European banks most exposed to the conflict. The broker estimated HSBC’s core Middle East business contributes about 4% of revenue and pretax profit, with pretax-profit exposure rising to nearly 9% when Egypt, Turkey and Saudi Arabia are included, and put the bank’s lending exposure in the region at about $23 billion. 3
HSBC has tried to steady the message. Chief Executive Georges Elhedery said this month the bank’s conviction in Gulf fundamentals “is unchanged”, and he has cast the Asia-Middle East corridor as a growth engine, but investors are still watching energy routes after Washington extended its deadline for Iran to reopen the Strait of Hormuz to April 7. 4
The macro backdrop in Britain has also turned harder. Consumer confidence fell to an 11-month low in March, and Reuters reported on Friday that early damage from the war is starting to show in growth and inflation expectations as gas prices have nearly doubled this month. 5
That leaves investors balancing a stronger HSBC story against a rougher backdrop. The bank said in February it would target return on tangible equity — a common measure of bank profitability — of 17% or better through 2028 after results beat expectations, and AJ Bell investment director Russ Mould said HSBC had “slimmed down” to focus on fewer regions and wealthier customers, a strategy that “appears to be working.” 6
Some analysts still see upside. Goldman Sachs analyst Chris Hallam reinstated coverage with a Buy rating on Thursday and a 1,675 pence target, describing HSBC as a rare mix of a “scaled deposit franchise” and “structural growth”; even so, the shares remain about 15% below the 52-week high of 1,410.6 pence set on Feb. 27. 7
The risk is that the war lasts long enough to turn a margin story into a credit and demand story. In a Reuters poll published on Thursday, most economists still expected the Bank of England to keep Bank Rate at 3.75% through year-end, but Santander CIB economist Gabriella Willis said “the risk of hikes has increased” the longer the conflict persists. 8
