LONDON, March 27, 2026, 13:07 GMT
Shares of HSBC Holdings Plc edged lower in London trading Friday, weighed down as UK stocks extended losses amid intensifying concerns over the Middle East conflict. By 1250 GMT, HSBC had slipped 0.45% to 1,192.2 pence, following a 1.14% drop to 1,197.6 pence at Thursday’s close. The FTSE 100, meanwhile, stood 0.7% lower at 1125 GMT.
HSBC finds itself squeezed on two fronts: surging funding costs at home, and its significant exposure to Gulf markets. On Thursday, finance minister Rachel Reeves summoned HSBC and other top lenders. The Treasury says these banks will be reaching out to 1.6 million customers ahead of expiring fixed-rate mortgages by year-end. Since Feb. 28, the average rate for a two-year fixed mortgage has shot up to 5.51% from 4.83%—and about 21% of mortgage products have disappeared from the market, according to Reuters.
Earlier this month, J.P. Morgan flagged HSBC and Standard Chartered as the European lenders with the biggest exposure to tensions in the region. The broker figures HSBC’s main Middle East operations account for roughly 4% of both revenue and pretax profit. That profit exposure climbs to close to 9% when factoring in Egypt, Turkey, and Saudi Arabia. Lending exposure for HSBC in the area? Around $23 billion, according to J.P. Morgan.
HSBC has worked to clarify its stance. Chief Executive Georges Elhedery, speaking this month, maintained that the bank’s confidence in Gulf fundamentals “is unchanged.” He’s described the Asia-Middle East corridor as a key driver for growth. Still, investors remain focused on energy supply routes after Washington pushed its deadline for Iran to reopen the Strait of Hormuz out to April 7. Reuters
Britain’s macro picture isn’t getting any easier. Consumer confidence slipped to its lowest level in nearly a year in March, while Reuters said Friday that early fallout from the war is already hitting projections for growth and inflation. Gas prices have surged, almost doubling in just this month.
So investors are weighing HSBC’s improved outlook against some tougher market conditions. Back in February, the bank set a goal to keep return on tangible equity at 17% or higher through 2028 after it posted better-than-expected results. Russ Mould, investment director at AJ Bell, pointed out that HSBC has “slimmed down,” now prioritizing select regions and a wealthier client base — a move he says “appears to be working.” Reuters
Some on the Street aren’t giving up on the stock. Chris Hallam at Goldman Sachs resumed coverage Thursday, slapping a Buy on HSBC and setting a price target at 1,675 pence. He called the bank a “scaled deposit franchise” with “structural growth.” Still, the shares are down roughly 15% from their 52-week high of 1,410.6 pence hit back on Feb. 27. TipRanks
There’s a risk here: if the war drags on, it could shift from a margin squeeze into pressure on credit and demand. Most economists, according to a Reuters poll out Thursday, still see the Bank of England holding Bank Rate at 3.75% for the rest of the year. But Gabriella Willis at Santander CIB flagged that “the risk of hikes has increased” as the conflict stretches out. Reuters
