Why HSBC And Lloyds stock Are trading Down?

Summary

• A majority of banking and financial services firms have expressed optimism for the long term after the pandemic, according to a report by banking platform Yobota.
• 76 per cent of companies invested in new technology, and 79 per cent of such companies were able to successfully pivot their business models under the current business climate.

Banking and financial services firms have had to innovate by increasingly adopting digital solutions and tools in order to cope with the headwinds faced by the ongoing covid-19 crisis. A recently released report by UK based banking platform Yobota found that a majority of banking and financial firms were optimistic about their future in a post pandemic scenario, with 75 per cent of industry leaders managed to streamline their administrative processes by incorporating new technology during the pandemic, while 65 per cent had lowered their operational costs. 

Furthermore, the report stated that about 76 per cent of banking and financial services companies had invested more in technology during the pandemic, and 79 per cent of companies who had adapted to digitisation were able to pivot under the current business climate.

In this article, we take a look at 2 FTSE 100 banking and financial services stocks that have performed well during the pandemic but today seems to be swaying to the negative market mood.  The benchmark index FTSE 100 was down by 0.30 per cent at 7,022.71 at 10 AM.

1. HSBC Holdings PLC (LON: HSBA) 

FTSE 100 listed banking major HSBC Holdings is a multinational financial services company headquartered in the UK. The company had announced its Q1 2021 results last month reporting that its adjusted profit before tax rose by 109 per cent to reach US$6.39 billion from US$ 3.06 billion a year ago.

(Source: Refinitiv, Thomson Reuters)

However, the company’s adjusted revenue fell by 3.2 per cent on a year-on-year basis to US$13.27 billion for the reported quarter. It also expects a mid-single digit percentage advancement in its customer lending business for the year.  HSBC’s stock was trading at GBX 445.05, down by 0.84 per cent on 17 May at 9:48 AM GMT+1, while its year-to-date returns stood at 17.57 per cent.

Also Read: HSBC (LON:HSBA) to Shut Its Main Branches in Scotland

2. Lloyds Banking Group PLC (LON: LLOY)

Another FTSE 100 listed company Lloyds Banking Group is a UK based banking giant. According to reports last week, the group is close to finalising a buyout deal worth £400 million with retirement products provider Embark.

(Source: Refinitiv, Thomson Reuters) 

This would be the first major acquisition for the group since it was privatised in 2017. Embark has over £38 billion worth of assets under administration and almost 500,000 customers in the UK. The reports come days after Lloyd’s group chief António Horta-Osório stepped down from his role.

Lloyds Banking Group’s stock was trading at GBX 48.24, down by 0.03 per cent on 17 May at 9:46 AM GMT+1, while its year to date returns stood at 32.41 per cent.

Also Read: Lloyds Bank’s Horta-Osório proposed as next chairman of Credit Suisse