HSBC’s ratings are based on the group’s very diverse and unique business franchise as well as management’s conservative risk appetite. While not immune to challenging operating conditions, the group generates solid earnings across credit cycles.

As well, the group maintains consistently reassuring liquidity, funding and capital positions. Between June 2015 and end-2017, the group implemented various actions to further simplify its business, improve profitability and strengthen risk management and controls. We do not expect these strategic priorities to materially change under the new senior management team.

Nevertheless, HSBC’s size and complexity mean that it is more vulnerable to operational, governance and internal control risks. With its broad-based focus on emerging markets and the ambition to facilitate international trade and capital flows, HSBC is also more exposed to the potential volatility inherent in these markets and to growing protectionist policies that may reduce global and regional trade flows.

Download the full rating report here.