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HSBC value belies income potential

The banking giant is closing in on its returns target and benefiting from rising US interest rates
November 15, 2018

Shares in HSBC (HSBA) are trading at around 12-month lows on the back of fears of an escalating US-China trade war and a widespread sell-off of blue-chip equities. However, that belies progress in controlling operating costs, growing returns on equity and falling risk-weighted assets, all of which increases the security of the shares' forecast 6.1 per cent dividend yield.

IC TIP: Buy at 640p
Tip style
Income
Risk rating
High
Timescale
Long Term
Bull points

High yield

Returns improving

Loan impairments falling

Cost growth slowing

Bear points

Trade war threat

Asian expansion costs

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