HSBC Holdings PLC (LSE:HSBA) has a clear edge over Standard Chartered PLC (LSE:STAN) in the battle of the Asia-focused banks, which analysts at US bank Citi doubt can be made up.
The banks have similar strategies, notes Citi, but HSBC seems better placed, with a more concentrated Asia footprint, a superior business mix, greater efficiencies and larger structural hedge.
That should continue to support profitability even as central banks cut rates, it adds.
Standard Chartered has taken some sensible strategic steps but Citi adds it struggles to see how it can match HSBC’s return profile while there is a “modest downside risk” to company targets.
Buy HSBC and hold Standard Chartered, concludes Citi, adding there is natural pair trade.