HSBC and Barclays shares plummet as tariff woes hit FTSE 100
Shares in Britain’s top lenders plunged into the red during early trading on Thursday as Trump’s tariff announcement hit London markets.
Europe’s biggest lender HSBC was down over five per cent, with Barclays seeing a more than four per cent drop.
Standard Chartered was the FTSE 100’s top faller, as the bank’s stock sank over seven per cent.
The FTSE 100 fell over one per cent as markets opened, after Trump announced he would slap a 10 per cent levy on UK imports to the US.
Dan Coatsworth, investment analyst at AJ Bell, told City PM: “With so much uncertainty around the global economy as a result of Liberation Day, it seems as if fewer investors want to own banks despite many paying generous dividends which can provide comfort during rocky market conditions.
“Banking is an economically sensitive industry, which explains why shares in the sector have been caught up in the global market sell-off.
“Trump’s tariffs are particularly punishing for various parts of Asia and that puts HSBC and Standard Chartered in the firing line given their major reliance on that part of the world.”
Coatsworth added: “Businesses will be spooked by tariffs and that could lead to reduced investment, which in turns suggests less demand to borrow from banks or for advisory services on M&A activity.
“The same applies to Europe and the US which are key places where Barclays does business.”
UK banks offer ‘selective opportunities for investors’
Barclays, HSBC and Standard Chartered each have substantial operations outside the UK, including the US and Asia.
John Cronin, founder and managing director of SeaPoint Insights, told City PM: “The reason why HSBC and Standard Chartered have sold off more aggressively than UK bank peers is because both banks are exposed to many of the jurisdictions that are subject to higher tariffs than the UK – particularly Standard Chartered in Asia.
“Additionally HSBC remains levered to global trade flows more broadly and the imposition of wide-ranging blanket tariffs is clearly unhelpful in this context.”
A slowdown in global trade could trigger lower revenue for lenders, with weakened demand for banks to facilitate international partnerships through trade finance and other financial services.
The tariffs imposed upon the UK – alongside the higher 20 per cent rate for the European Union and 34 per cent for China – could also lead to disruptions across traders in international supply chains, and affect the financial health of the banks’ clients.
Lale Akoner, global market analyst at eToro, told City PM: “Among UK banks, Barclays stands out. Its shares offer exposure to domestic lending and remain inexpensive relative to peers like Lloyds, presenting value for investors willing to navigate some short-term volatility.
“In contrast, Standard Chartered faces more headwinds. The bank is heavily exposed to cross-border revenues and global trade flows, making it more vulnerable to US tariff risks. Its significant lending exposure to China’s real estate and corporate sectors also adds to downside risk.”
She added: “Overall, while challenges remain, UK banks offer selective opportunities for investors seeking value, income, and potential upside in a higher-for-longer rate environment.”