I'm LongbridgeAI, I can summarize articles.UBS cut target prices for HSBC Holdings and Standard Chartered, maintaining a Neutral rating on both. The broker cited lower peer valuation multiples as the primary reason for the reduction. While UK banks face pressure from narrowing net interest margins and potential tax hikes, they benefit from accelerating loan growth and attractive valuations. UBS maintains Buy ratings on other UK domestic banks like Barclays and Lloyds, viewing policy stability and improving credit demand as positive catalysts.
UBS said in a research report that British banks are facing pressure from narrowing NIM and potential tax hikes, but are benefiting from accelerating loan growth, regulatory easing and attractive valuations. The broker believes UK domestic banks offer better EPS growth at discounted valuations, and maintained a Neutral rating on HSBC HOLDINGS (00005.HK) -1.100 (-0.772%) Short selling $173.61M; Ratio 22.463% and STANCHART (02888.HK) -3.400 (-1.643%) Short selling $633.30K; Ratio 0.265% . The TP for HSBC HOLDINGS (00005.HK) -1.100 (-0.772%) Short selling $173.61M; Ratio 22.463% was cut from HKD170.8 to HKD157, while the TP for STANCHART (02888.HK) -3.400 (-1.643%) Short selling $633.30K; Ratio 0.265% was lowered from HKD239.1 to HKD228.
UBS noted that investor focus on UK domestic banks has centered on product spreads, particularly deposits, and the impact of potential tax increases. However, related data remains stable, while the impact of higher taxes is manageable and already reflected in share prices. The broker estimated that if the bank surcharge doubles, the earnings impact on Barclays and HSBC HOLDINGS (00005.HK) -1.100 (-0.772%) Short selling $173.61M; Ratio 22.463% would be around 1%, while the impact on Lloyds and NatWest would be about 3% to 4%. This could be offset by a widening of loan or deposit spreads by just 2 to 3 bps. Policy stability is viewed as a greater positive catalyst and may emerge after the Budget on Oct 28.
UBS said UK domestic banks are trading at forecast P/E ratios of 7.7x and 6.9x for 2027 and 2028, representing discounts of 19% and 20% to the sector, and discounts of 34% and 40% to the FTSE 100 and Stoxx 600 respectively. The broker is optimistic about accelerating corporate credit demand, tailwinds from hedging income and proven cost control execution. It expects near-term bank stock performance to be driven by oil prices, sovereign bond yields and artificial intelligence-related factors.
UBS maintained Buy ratings on Barclays, Lloyds, NatWest, Paragon, Shawbrook and Close Brothers, while keeping Neutral ratings on HSBC HOLDINGS (00005.HK) -1.100 (-0.772%) Short selling $173.61M; Ratio 22.463% and STANCHART (02888.HK) -3.400 (-1.643%) Short selling $633.30K; Ratio 0.265% . HSBC HOLDINGS (00005.HK) -1.100 (-0.772%) Short selling $173.61M; Ratio 22.463% and STANCHART (02888.HK) -3.400 (-1.643%) Short selling $633.30K; Ratio 0.265% have retreated 12% to 13% from their peaks. UBS believes the stocks remain tactically attractive amid improving USD rate outlooks and continued momentum in Asia wealth management and financial markets businesses, though medium- to long-term growth visibility remains more important. The broker cut the TP for HSBC HOLDINGS (00005.HK) -1.100 (-0.772%) Short selling $173.61M; Ratio 22.463% to GBX1,501 from GBX1,620 previously, and lowered the TP for STANCHART (02888.HK) -3.400 (-1.643%) Short selling $633.30K; Ratio 0.265% to GBX2,188 from GBX2,295, mainly due to lower peer valuation multiples.(ad/j)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-10-26 12:25.)