Broker snap: Nomura ups HSBC price target

17th Dec 2009 13:05

Banking giant HSBC's balance sheet strength sets it apart from most of its UK rivals, reckons Nomura Securities, which has reiterated its 'buy' recommendation for the stock.'With a loans/deposits ratio of c80% and core tier 1 ratio of 9% as at Q3 [third quarter] 2009, HSBC remains balance sheet advantaged relative to the sector in our view, especially given the outlook for regulatory change,' opines Nomura analyst Robert Law.The broker thinks the group is set to 'see earnings upgrades from strong growth in Asia and an improving outlook for losses in its US businesses.' Apart from the US personal financial services business, Law sees upside in HSBC's commercial banking operations over the medium term 'as revenues benefit from improved volumes and margins improve when local interest rates begin to rise.'Nomura has lifted its price target for the stock to 890p.