Broker snap: HSBC no temptation for Credit Suisse

8th Nov 2011 13:37

Britain's biggest bank, HSBC, is valued fairly at around its current 540p level according to analysts at Credit Suisse.The market is readying itself for HSBC third quarter results tomorrow as investors continue to fret about the European banking system.Credit Suisse (CS) is lowering its underlying earnings per share predictions for the bank by 7.6% for 2011 and 5.1% for 2012. It's also bringing down HSBC's target price from 640p to 610p.Full year revenues are forecast to be $17.7bn, down 11.5% on 2010 with indications from the bank that "credit and rates were weaker in Q3 [third quarter]".CS also says it will be looking "for evidence that (HSBC) is starting to deliver on its $2.5 - $3.5bn cost reduction programme." The expectation is that it may actually be increased to over £3.5bn.The key issues for the North American business will be the quality of its assets and how much capital is being shipped back to the parent group in London.The conclusion of today's note says simply: "HSBC as fairly valued and (we) remain Neutral".BS