HSBC Holdings reported an annualized return on tangible equity of 11.4% in Q2, excluding a $2.1 billion noncash loss. Despite this, shares fell 4% in both Hong Kong and London due to weak profits at subsidiary Hang Seng Bank. Hang Seng shares dropped over 7% after higher-than-expected credit losses on Hong Kong real estate, impacting HSBC’s results.

The stock maintains fair value estimates of GBX 1,000 for London shares, HKD 104 for Hong Kong shares, and $67 for ADRs, offering 7%-8% upside post-drop. HSBC is restructuring operations across core areas like Hong Kong, the UK, and international banking. CEO Georges Elhedery aims to drive cost efficiency through simplification, with improvements unlikely before 2026.

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